The Reserve Bank purchases $100 million of government securities from the National Australia Bank.The balance sheet for the National Australia Bank shows ________ in its total assets and ________ in its total liabilities.

Question

Quizplus · Accepted Answer

When the Reserve Bank purchases government securities, it increases the bank's reserves, but the total assets and liabilities remain unchanged as the transaction is an asset swap.

The Reserve Bank Purchases $100 Million of Government Securities from the National