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What is the level of excess reserves

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Assume that the banking system has total reserves of $575 billion.

Assume also that required reserves are 25 percent and that banks do not hold any excess reserves and households hold no currency.

Now suppose that the Fed decreases the required reserves to 20.

What is the level of excess reserves? Make sure to include a negative sign if necessary.

Answer 115, Can you please show how to get this answer?

Reference no: EM132231759

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