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    Excess reserves

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    Given that a bank has 90 in demand deposits and 110 in savings deposits in libilities and 25 in Reserves at the Fed, is this all the information I need for determining the banks excess reserves?

    The required reserve ratio is 5% on all deposits

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    Solution Preview

    Excess reserves are the amount of bank reserves over and above those that the Federal Reserve System requires a bank to keep. Excess reserves are what banks use to make loans. If a ...

    Solution Summary

    Excess reserves are demonstrated.

    $2.19