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    The T Account for Bonds to the Bank

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    The Fed sells $2 million of bonds to a bank, how does this reflect on reserves and the monetary supply- how does this look in T accounts?

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    https://brainmass.com/economics/banking/t-account-bonds-bank-117235

    Solution Preview

    When Fed sells bonds it withdraws reserves from the banking system and hence the money supply decreases. By selling bonds Fed is ...

    Solution Summary

    The T Account is described.

    $2.19