The following net transaction accounts and cash reserves at the Federal Reserve have been documented by a bank for computation of its reserve requirements (in millions) under lagged reserve accounting.

November Monday 2nd Tuesday 3rd Wednesday 4th Thursday 5th Friday 6th Net Transaction Accounts $230 $220 $200 $190 $230 Reserves at Fed $10 $9 $11 $8 $7 Monday 9th Tuesday 10th Wednesday 11th Thursday 12th Friday 13th Net Transaction Accounts $170 $250 $260 $220 $200 Reserves at Fed $11 $12 $9 $5 $6 Monday 16th Tuesday 17th Wednesday 18th Thursday 19th Friday 20th Net Transaction Accounts $280 $300 $340 $170 $160 Reserves at Fed $8 $7 $6 $5 $6 Monday 23th Tuesday 24th Wednesday 25th Thursday 26th Friday 27th Net Transaction Accounts $250 $270 $150 $250 $280 Reserves at Fed $9 $8 $4 $5 $7 December Monday 30th Tuesday 1st Wednesday 2nd Thursday 3rd Friday 4th Net Transaction Accounts $340 $350 $250 $240 $220 Reserves at Fed $11 $12 $11 $10 $9 Monday 7th Tuesday 8th Wednesday 9th Thursday 10th Friday 11th Net Transaction Accounts $280 $290 $300 $310 $320 Reserves at Fed $12 $11 $10 $9 $8 Monday 14th Tuesday 15th Wednesday 16th Thursday 17th Friday 18th Net Transaction Accounts $180 $200 $360 $290 $280 Reserves at Fed $9 $8 $5 $7 $5 Monday 21th Tuesday 22th Wednesday 23th Thursday 24th Friday 25th Net Transaction Accounts $190 $280 $250 $220 $200 Reserves at Fed $11 $14 $9 $8 $7 Suppose we are focusing the maintenance period of December 3 - 16. The average vault cash for its corresponding computation period is $2 million per day.

a) What level of average daily reserves is required to be held by the bank with the Federal Reserve during the maintenance period, December 3 - 16?

b) Do the bank's reserves at the Federal Reserve during the maintenance period meet the reserve requirements? Suppose there are no previous reserve deficits carried over.

c) What is the lowest level of reserves at the Federal Reserve the bank can hold without penalty?

14) The following net transaction accounts and cash reserves at the Federal Reserve have been documented by a bank for computation of its reserve requirements (in millions) under lagged reserve accounting. November Monday Tuesday Wednesday Thursday Friday end 3rd 4th 5th 6th Net Transaction Accounts $230 $220 $200 $190 $230 Reserves at Fed $10 $11 $7 Monday Tuesday Wednesday Thursday Friday 9th 10th 11th 12th 13th Net Transaction Accounts $170 $250 $260 $220 $200 Reserves at Fed $11 $12 $9 $5 $6 Monday Tuesday Wednesday Thursday Friday 16th 17th 8th 19th 20th Net Transaction Accounts 280 $300 $340 $170 $160 Reserves at Fed $8 $7 56 $5 $6 Monday Tuesday Wednesday Thursday Friday 23th 24th 25th 26th 27th Net Transaction Accounts $250 $270 $150 $250 $280 Reserves at Fed $9 $8 $4 $5 $7 December Monday Tuesday Wednesday Thursday Friday 30th 1 st 2nd 3rd 4th Net Transaction Accounts $340 $350 $250 $240 $220 Reserves at Fed $11 $12 $11 $10 $9 Monday Tuesday Wednesday Thursday Friday 7th 8th 10th 1 1 th Net Transaction Accounts $280 $290 $300 $310 $320 Reserves at Fed $12 $11 $10 $8 Monday Tuesday Wednesday Thursday Friday 14th 15th 16th 17th 18th Net Transaction Accounts $180 $200 $360 $290 $280 Reserves at Fed $8 $5 $7 $5 Monday Tuesday Wednesday Thursday Friday 21th 22th 23th 24th 25th Net Transaction Accounts $190 $280 $250 $220 $200 Reserves at Fed $11 $14 $9 $8 $7 Suppose we are focusing the maintenance period of December 3 - 16. The average vault cash for its corresponding computation period is $2 million per day. a) What level of average daily reserves is required to be held by the bank with the Federal Reserve during the maintenance period, December 3 - 16? b) Do the bank's reserves at the Federal Reserve during the maintenance period meet the reserve requirements? Suppose there are no previous reserve deficits carried over. c) What is the lowest level of reserves at the Federal Reserve the bank can hold without penalty