This bank is described perfectly by its name -- it's extremely typical of banks
here in Economia overall.
Now, our main problem is unemployment, and I think monetary policy -- open
market operations -- is the best way to tackle it.
To do so, should we buy bonds from banks like Typical Bank, or sell bonds to
banks like Typical Bank?
Brittany Melendez
Buy bonds from banks.
Geoffrey
That's right! Buying bonds is easy (expansionary) monetary policy, appropriate in
this case.
Very well. The central bank will purchase $0.50 million in government bonds from
Typical Bank to complete these open market operations.
As a result of this move, Typical Bank's total assets will:
Not change
Increase by $0.50 million
