A = Banks E= Non-Bank Public K= B = , F = Assets ,J= Securities (A) Loans to Banks (C) The above figure shows the three balance sheets by the players in the money supply process. These are aggregate balance sheets. For example, the deposits in the non-bank-public balance sheet is the sum of all the deposits owned by individuals and businesses. An event occurs. You need to figure out which one of the above entries will change as a result of this event, all else the same. Consider only the immediate effects. Don't assume any subsequent decisions by the players. , L = Assets Place a 1 in the box if the entry will change, 0 otherwise. No commas or decimals, just 0 and 1. Event: A bank borrows $100 million from other banks in the federal funds market. The Fed Reserves (E) Securities (G) Loans (1) Liabilities and Net Worth Currency in Circulation (B) Reserves (D) C= Banks Assets Currency in Circulation (K) Loans (L) Deposits (M) Securities (N) G= Liabilities and Net Worth Deposits (F) Borrowings (H) Bank Capital (J) Public Liabilities and Net Worth ,M= Non-Bank Net Worth (0) ,D= ,H= , N=