A new bank has vault cash of 1million and 5 million in deposit held at its Federal reserve district bank.

| November 9, 2018

A new bank has vault cash of 1million and 5 million in deposit held at its Federal reserve district bank. a. If the required reserve ration is 8% what dollar amount of deposits can the bank have? b. If the bank holds $65million in deposits and currently holds bank reserves such that excess reserves are zero, what required reserves ratio is implied?

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