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Demand deposits of memberbanks

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Reference no: EM131046302

If the Federal Reserve sets a 15% required reserve ratio and the total demand deposits of memberbanks are $220 billion,

a) how much must the banks hold as required reserves?

b) calculate the money multiplier. If banks presently hold $55 billion in reserves,

c) what are the banks' excess reserves?

d) calculate the potential money supply increase.

Reference no: EM131046302

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