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Business, 06.05.2020 07:03 hany90

A bank with $1 billion in deposits holds $70 million in cash, $80 million on deposit with the Fed, and owns $100 million in government securities. If a fall in the reserve requirement ratio generates excess reserves of $30 million, and prior to the change the bank had no excess reserves, then the former reserve ratio was and the new reserve ratio is .

a. 15 percent; 12 percent
b. 25 percent; 20 percent
c. 15 percent; 10 percent
d. 25 percent; 22 percent

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A bank with $1 billion in deposits holds $70 million in cash, $80 million on deposit with the Fed, a...
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