A commercial bank holds $120 million in transaction deposits and $240 million in nontransaction reservable liabilities. Suppose that reserve requirements set by the Federal Reserve Board stipulate that 3 percent of the first $30 million in transaction deposits and 12 percent of any excess transaction deposits over $30 million must be held in a legal reserve account. Similarly, suppose 3 percent of nontransaction liabilities must be placed in the legal reserve account. What is the bank's total reserve requirement based on the above deposit totals? Suppose the bank's legal reserve account has a current average balance of $20 million. Does the bank have any excess reserves? If so, how much?

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The Answer of A commercial bank holds $120 million in transaction deposits and $240 million in nontransaction reservable liabilities. Suppose that reserve requirements set by the Federal Reserve Board stipulate that 3 percent of the first $30 million in transaction deposits and 12 percent of any excess transaction deposits over $30 million must be held in a legal reserve account. Similarly, suppose 3 percent of nontransaction liabilities must be placed in the legal reserve account. What is the bank's total reserve requirement based on the above deposit totals? Suppose the bank's legal reserve account has a current average balance of $20 million. Does the bank have any excess reserves? If so, how much?

A Commercial Bank Holds $120 Million in Transaction Deposits and $240