BSW Bank currently has $$800$ million in transaction deposits on its balance sheet. The Federal Reserve has currently set the reserve

requirement at $6$ percent of transaction deposits.

a$.$ If the Federal Reserve decreases the reserve requirement to $5$ percent, show the balance sheet of BSW and the Federal Reserve

System just before and after the full effect of the reserve requirement change. Assume BSW withdraws all excess reserves and gives

out loans and that borrowers eventually return all of these funds to BSW in the form of transaction deposits.

b$.$ Redo part $($a$)$ using a $8$ percent reserve requirement.

Complete this question by entering your answers in the tabs below.

If the Federal Reserve decreases the reserve requirement to $5$ percent, show the balance sheet of BSW and the Federal Reserve System just

before and after the full effect of the reserve requirement change. Assume BSW withdraws all excess reserves and gives out loans and that

borrowers eventually return all of these funds to BSW in the form of transaction deposits. $($Do not round intermediate calculations. Enter your

answers in millions rounded to the nearest dollar amount.$)$