Question

Discuss with example about   federal reserve system & explain how banks’ balance sheets are formed?​

Answer 1

Answer:

The Fed's assets and liabilities

U.S. paper currency, as well as money that commercial banks hold in accounts at the Fed, are counted as a liability. ... When the Fed buys these assets, they mark up banks' reserve accounts at the Fed with cash in an equivalent value to the asset it purchased and put on its balance sheetCreate your balance sheet

Create a balance sheet listing all of your asset and liability items. At the end of the assets and liabilities sections, add a row for total assets and for total liabilities. You'll add dollar amounts for each item for the next 3 years.