Balance Sheet Workspace Practice Problems. Problem 1 The US Treasury borrows from the nonbank public by selling them US Treasury securities. The nonbank.

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Presentation transcript:

Balance Sheet Workspace Practice Problems

Problem 1 The US Treasury borrows from the nonbank public by selling them US Treasury securities. The nonbank public pays the Treasury with Federal Reserve Notes.

Problem 2 The US Treasury borrows from commercial banks by selling them US Treasury securities and the US Treasury keeps the borrowed money in their account at the Federal Reserve.

Problem 3 The Federal Reserve buys US Treasuries from the nonbank public and pays using Federal Reserve Notes.

Problem 4 The Federal Reserve sells US Treasuries to a commercial bank.

Problem 5 A commercial bank makes a loan to the nonbank public.

Problem 6 A commercial bank transfers (deposits) excess vault cash to the Federal Reserve.

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