1. Table 11.1 A Simplified Balance Sheet of a Private Bank AssetsLiabilities Loans $ 70 millionDeposits $ 100 million Government Bonds $ 20 million Reserves $ 10 million

2. Table 11.2 A Simplified Balance Sheet of the Federal Reserve AssetsLiabilities Government Bonds $ 750 billionCurrency in Circulation $ 700 billion Bank reserves $ 50 billion

3. Table 11.3 An Open Market Purchase of Government Bonds by the Fed (a) Change in the Fed Balance Sheet AssetsLiabilities Government Bonds + 11 millionBank reserves +$ 11 million (b) Change in ABCBank's Balance Sheet AssetsLiabilities Government Bonds  $ 11 million Reserves +$ 11 million

4. Table 11.4 A Loan by ABCBank Becomes a Deposit in XYZBank (a) Next Change in the ABCBank's Balance Sheet AssetsLiabilities Loans +$ 10 million Reserves  $ 10 million (b) Change in XYZBank's Balance Sheet AssetsLiabilities Reserves+$ 10 millionDeposits +$ 10 million

5. (a)(b) Figure 11.1 The Market for Federal Funds and an Open Market Purchase

6. Figure 11.2 Maintaining the Federal Funds Target Rate

7. Figure 11.3 The Federal Fund and Prime Rates, 1994-2005

8. Figure 11.4 The Intended Investment Schedule

9. Figure 11.5 An Increase in Investor Confidence

10. Figure 11.6 Expansionary Monetary Policy and the AD Curve

11. Figure 11.7 The Expansionary Monetary Policies of 2001-2003

12. Figure 11.8 Expansionary Monetary Policy in an Environment of Pessimism

13. (a) (b) Figure 11.9 The Market for Government Bonds

14. Figure 11.10 The Federal Funds and 3-Month Treasury Bill Rates, 1994-2005.

15. Figure 11.11 The Demand and Supply of Money, with an Increase in Supply

16. Figure 11.12 Federal Funds, Nominal and Real 30-Year Fixed Mortgage Rates, 1995-2005