Suppose the banking systems nonborrowed reserves

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Suppose the banking system's nonborrowed reserves total $48.3 billion with total legal reserves standing at $51.2 billion. What must borrowed reserves be? This morning the Federal Reserve decided to undertake the sale of $500 million in government securities through open market operations. What will be the new level of nonborrowed reserves? If interest rates don't change, what will be the new level of total reserves? What must you assume to make this calculation? If interest rates do change, which way are they likely to move?

Reference no: EM131312591

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