1. A new bank has a vault cash of $1 million and $5 million in deposits held at a Federal Reserve District Bank. a) If the require reserves ratio is 8%, what dollar amount of the deposits can the bank have? b) If the bank holds $65 million in deposit and currently holds Bank reserves such that excess reserves are zero, what require reserve ratio was implied? 2.Assume a bank have $5 million in deposit and $1 million in vault cash. If the bank hold $1 million in excess reserves and the require reserves ratio of 8%, what level of deposits are being held?

3. A bank has $110 million in deposit and holds $10 million in vault cash. a) If the required reserve ratio is 10%, what dollar amount of reserve must be held at Federal Reserved Bank? b) How would you answer for part (a) change if the required reserves was increased to 12%?