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Consider a central bank policy to maintain 9% reserves on deposits held by commercial banks. A bank, ALFA, currently has $10 million in deposits and

Consider a central bank policy to maintain 9% reserves on deposits held by commercial banks. A bank, ALFA, currently has $10 million in deposits and holds $1 million in reserves at the central bank. What is the excess reserve ratio? What will be the requirements if the bank is to add $500,000 additional deposits?

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