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Essay

Monetary Policy

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Issue:

Miscellaneous

 

Written by:

Mildred C

 

Date added:

October 15, 2014

 

Level:

University

 

Grade:

A

 

No of pages / words:

10 / 2529

 

Was viewed:

282 times

 

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Essay content:

This is the most important source of money in the United States economy (McConnell-Brue, 2004, p 252). The process of a commercial bank can be understood through its balance sheet, or its statement of assets, and claims on assets, that sum up the financial situation of the bank. The balance sheet is where assets equal liabilities plus net worth...
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The balance sheet is where assets equal liabilities plus net worth. The value of assets must equal the amount of claims against those assets. In addition, commercial banks are required to keep reserves on deposit in a Federal Reserve Bank or as vault cash (McConnell-Brue, 2004, p 253). The reserves are the amount of funds equal to a specified percentage of the bank's own checkable-deposit liabilities as cash...
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