Question 2 Financial institutions are required to hold reserves with the Central Bank. Financial institutions may also, at their discretion, deposit excess reserves with the central bank. Assume a bank has policy of keeping excess reserves with the central bank. The bank reserves 15% of all of its deposits with the central bank, including excess reserves. The bank has deposits totalling $50 million and excess reserves of $1.5 million. a) What is the central bank's required reserves rate? [4 marks] b) What is the amount that will be required as reserve with the central bank on a new deposit of $200,000? [4 marks)