Problemdeposits in all financial institutions equal 2, Ask an Expert

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Problem:

Deposits in all financial institutions equal $2 trillion. The total reserves held by these institutions are $240 billion, $100 billion of which is in excess of reserve requirements.

Required:

Question 1: What is the percentage reserve requirement?

Question 2: What would the percentage reserve requirement have to be to maintain the existing amount of reserves ($240 billion) but eliminate excess reserves?

Note: Please explain comprehensively and give step by step solution.

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M91149334

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