Transaction Review

I have created this table as a quick review of transactions that do, and do not, effect the money supply.

In the first column (titled "Transaction") I have described the nature of the transaction.
In the second column (titled "Net Inflation/Deflation") I have entered the net increase, decrease, or no change in the quantity of money.
In the third column (titled "Effect of Transaction") I have described the net increase, decrease, or no change in the quantity of money.

Summary of Money Matters Transactions
	Transaction	Net Inflation/ Deflation	Effect of Transaction
1.	You take out a New Real Estate Loan for $250,000 from Your Bank.	250,000	This transaction increases Deposits at Your Bank and adds new money to the money supply.
2.	You then payoff your old mortgage loan from Other Bank.	(50,000)	This transaction reduces Deposits at Other Bank and subtracts money from the money supply.
3.	The Fed Purchases $4 Million of Securities from the two banks: $2 Million from Your Bank and $2 Million from Other Bank.	No change	The transaction adds $4 Million in bank reserves ($2 Million at each bank) but it does not increase deposits and thereby does not increase the supply of money in circulation.
4.	The Fed Purchases $3 Million of Securities from a non-bank dealer that banks with Other Bank.	3,000,000	The transaction adds $3 Million to the bank reserves of Other Bank. When Other Bank credits the dealer's deposit account, it simultaneously increases the supply of money in circulation by $3 Million.
5.	The Fed sells $10 Million of Securities to the two banks: $5 Million to Your Bank and $5 Million to Other Bank.	No change	The transaction subtracts $10 Million from bank reserves ($5 Million from each bank) but it does not change deposits and does not decrease the supply of money in circulation.
6.	The Fed sells $2.5 Million of Securities to a non-bank dealer that banks with Other Bank.	(2,500,000)	The transaction subtracts $2.5 Million from bank reserves. It reduces the amount of Deposits and thereby decreases the supply of money in circulation by $2.5 Million.
7.	You inherit $500,000 from a distant relative.	No change	The money you receive, which Other Bank transfers to Your Bank for your account, has no impact on the quantity of money in the system.
8.	With part of your surprise inheritance you decide payoff the real estate loan you took out from Your Bank earlier.	(250,000)	When you payoff that loan you reduce the Deposit liabilities at Your Bank, causing a $250,000 reduction in the quantity of money.
	All Transactions	$450,000	Net increase in money supply.