BSW Bank currently has $200 million in transaction deposits on

its balance sheet. The Federal Reserve has currently set the

reserve requirement at 6 percent of transaction deposits.

If the Federal Reserve decreases the reserve requirement to 4

percent, show the balance sheet of BSW and the Federal Reserve

System just before and after the full effect of the reserve

requirement change. Assume BSW withdraws all excess reserves and

gives out loans, and that borrowers eventually return all of these

funds to BSW in the form of transaction deposits. (Do not

round intermediate calculations. Enter your answers in millions

rounded to the nearest dollar amount.)

sheets

Federal Reserve Bank

Assets

Liabilities

select)Reserve deposits at FedLoansTransaction depositsReserve

accountsSecurities

$  million

select)Reserve accountsLoansSecuritiesTransaction depositsReserve

deposits at Fed

$  million

BSW Bank

Assets

Liabilities

select)Transaction depositsReserve deposits at

FedSecuritiesLoansReserve accounts

$  million

select)Transaction depositsSecuritiesReserve deposits at FedReserve

accountsLoans

$  million

select)SecuritiesReserve deposits at FedLoansTransaction

depositsReserve accounts

changes

Federal Reserve Bank

Assets

Liabilities

select)Reserve accountsTransaction depositsReserve deposits at

FedLoansSecurities

$  million

select)Reserve deposits at FedLoansSecuritiesTransaction

depositsReserve accounts

$  million

BSW Bank

Assets

Liabilities

select)Reserve deposits at FedTransaction depositsReserve

accountsSecuritiesLoans

$  million

select)Transaction depositsLoansReserve accountsSecuritiesReserve

deposits at Fed

$  million

select)Reserve deposits at FedSecuritiesReserve accountsTransaction

depositsLoans

Redo part (a) using a 8 percent reserve requirement. (Do

not round intermediate calculations. Enter your answers in millions

rounded to the nearest dollar amount.)

sheets

Federal Reserve Bank

Assets

Liabilities

select)SecuritiesReserve deposits at FedTransaction depositsReserve

accountsLoans

$  million

select)LoansTransaction depositsSecuritiesReserve deposits at

FedReserve accounts

$  million

BSW Bank

Assets

Liabilities

select)SecuritiesLoansTransaction depositsReserve deposits at

FedReserve accounts

$  million

select)Reserve accountsTransaction depositsSecuritiesReserve

deposits at FedLoans

$  million

select)Reserve accountsTransaction depositsSecuritiesLoansReserve

deposits at Fed

changes

Federal Reserve Bank

Assets

Liabilities

select)Transaction depositsReserve deposits at FedLoansReserve

accountsSecurities

$  million

select)LoansSecuritiesReserve deposits at FedTransaction

depositsReserve accounts

$  million

BSW Bank

Assets

Liabilities

select)Reserve accountsReserve deposits at FedSecuritiesTransaction

depositsLoans

$  million

select)LoansTransaction depositsReserve accountsSecuritiesReserve

deposits at Fed

$  million

select)SecuritiesReserve accountsLoansTransaction depositsReserve

deposits at Fed