Excess reserves and there is no currency drain

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The table shows a bank’s balance sheet. The bank has no excess reserves and there is no currency drain. Suppose the bank sells $2 million of government securities to the central bank in an open market operation. As soon as the sale happens, the bank can create $.... million of new money. The total quantity of new money created when the bank has no excess reserves is $....million. assets and liabiliies table: reserves at the Fed 20, cash in vault 10, securities 45, loans 110, checkable deposit 10, saving deposits 75 ( all in million).

Reference no: EM131101511

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