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    Fed's balance sheet

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    The following question asked that suppose that the Federal Reserve buys $5 million worth of government securities from General Motors. Insert the effects in the blanks that follow.
    Effects on Fed's balance sheet:
    Securities___________________Member bank reserves__________________
    Effects on balance sheet of General Motors' bank:
    Reserves___________________Demand deposits_______________________.

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    Effects on Fed's balance sheet are shown in the solution.