a. 1/A = 0.08
0.08A = 1
A = $12.5 Million.
b.
A new bank has vault cash of $1 million and $5 million in deposits
held at its Federal Reserve District Bank.
a. If the required reserves ratio is 8 percent, what dollar amount
of deposits can the bank have?
b. If the bank holds $65 million in deposits and currently holds
bank reserves such that excess reserves are zero, what
required reserves ratio is implied?
1 answer