Q8. Suppose banks in a nation hold $100 million in required reserves, $25 million excess reserves, $250 million in government bonds and $1,000 million in demand deposits.

Assume all customers in this nation do not hold cash but deposits in the banks. Also all banks maintain same level of excess reserves.

1. Find amount of reserves (=required + excess )
2. What if the central bank lends $5 million to banks and banks maintain same level of required and excess reserve ratio, find quantity of money in this nation.