The average demand deposit balance of a local bank during the most recent reserve computation…

The average demand deposit balance of a local bank during the most recent reserve computation period is $225 million. The amount of average daily reserves at the Fed during the reserve maintenance period is $16 million, and the average daily vault cash corresponding to the maintenance period is $4.3 million. ( LG 13- 4)

a. What is the average daily reserve balance required to be held by the bank during the maintenance period?

b. Is the bank in compliance with the reserve requirements?

 

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