Suppose that Riverview Community Bank loans out all of its excess reserves that resulted from the $178,000 Fed bond purchase


Suppose that Riverview Community Bank loans out all of its excess reserves that resulted from the $178,000 Fed bond purchase to Ms. Barlett who uses the funds to purchase a house from Mr. Rho. Mr. Rho deposits the proceeds of the home sale into his checking account at Waterfield Bank. Illustrate the T-account for Waterfield Bank after this transaction has occurred.


Leave a Reply

Your email address will not be published.