8. We have seen how changes in the Fed's balance sheet can affect the amount of reserves in the banking system. The Fed publishes the essentials of its balance sheet in tables showing sources and uses of reserve funs. You can find them on the web at <http://www.federalreserve.gov/releases/H41/Current/>.
a. What is the dominant asset the Fed has on its balance sheet?
b. Which items on its balance sheet earn interest for the Fed? On which does it have to pay interest? What do you conclude about the profitability of the Fed?
c. See if you can find how big bank deposits with the Federal Reserve were prior to September, 2008. Do you think banks were complaining a lot about how much money they were losing because of reserve requirements?
d. What is the dollar amount of Federal Reserve notes that the Fed has issued? The population of the United States is less than 300 million. Using 300 million as the population of the US, what is your share of that currency? Do you have your share?
e. If you answered d correctly, it should not surprise you that at least half of the paper money that the Federal Reserve has issued is held outside of the U.S. Is the fact that people in other nations want to hold U.S. dollars good or bad for the citizens of the United States? (Hint: We trade paper that has no value except as money for real goods and services.)