Questions: The central bank will purchase 0.60 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: - Increase by 0.60 million - Not change

The answer is the first one: Increase by \$0.60 million.

Explanation:

1. Increase by \$0.60 million: When the central bank purchases government bonds from a bank, it pays the bank, which increases the bank's reserves. This transaction increases the bank's total assets by the amount of the bond purchase, which in this case is \$0.60 million. Therefore, this option is correct.

2. Not change: This option is incorrect because the purchase of bonds by the central bank directly increases the bank's reserves, thereby increasing its total assets. The bank's balance sheet will reflect this increase in assets due to the additional reserves.

In summary, when the central bank buys bonds from a bank, it injects money into the bank, increasing the bank's total assets by the amount of the purchase.