Item Cash held by public Transactions account balances Required reserves Excess reserves U.S. Treasury bonds...
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Item Cash held by public Transactions account balances Required reserves Excess reserves U.S. Treasury bonds held by the public Amount $120 billion $800 billion $80 billion $0 billion $600 billion Refer to the table. Suppose the Fed sells $15 billion worth of bonds in the open market and the public finances these purchases with their transactions account balances. The lending capacity of the banking system will by $15 billion Multiple Choice rise, more than rise; less than a fall; more than O O fall; less than
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