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    The Federal Reserve

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    The Federal Reserve purchaseses $1 million in U.S. Treasury Bonds from a bond dealer, and the dealer's bank credits the dealer's account. The required reserve ratio is 15 percent, and the bank typically lends any excess reserves immediately. Assuming that no currency leakage occurs, how much will the bank be able to lend to its customers following the Fed's purchase?

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    The following is a "start" ....you should add your own additional words to customize the answers to your own individual style of writing (otherwise your teacher would notice that someone else other than you wrote the answers)......hope this helps you.

    The Federal Reserve ...

    Solution Summary

    Fractional Reserve Banking is explored.