Values for demand deposits and bank loans

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Question 1: Bank reserves are 300 billion and the reserve requirement is 10%. Banks currently do not hold excess reserves. What are the Values for Demand Deposits and Bank Loans?

Question 2: If banks decide to hold 2.5% in excess reserves what are the new values for Demand Deposits and Bank reserves?

Question 3: Assuming banks continue to hold 2.5% excess reserves, what value for the reserve requirement would return Demand Deposits and Bank Loans to their values in #1?

Question 4: Rather than alter the reserve requirement, what would the value of bank reserves would return demand deposits and bank loans to their values in #1?

Reference no: EM132422492

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