M & B 4th Edition by Dean Croushore

Exercise 17

Look in the latest Federal Reserve Bulletin (or on the Internet at the Federal Reserve Board's Web site: www.federalreserve.gov ), and fi nd the current set of reserve requirements that banks must meet. Then calculate the reserve requirements for banks with the following amounts of transactions deposits. Calculate both the marginal reserve requirement (the additional amount of required reserves per dollar of additional transactions deposits) and the average reserve requirement (required reserves divided by transactions deposits). Consider four banks with the following amounts of transactions deposits:
a $3.8 million
b $28.9 million
c $193.0 million
d $5.7 billion