In September 2007, Regions Bank held $3 million in reserves against M1 deposits and made $83 million in loans. Between September 2007 and September 2008, deposits decreased from $114 million to $95 million. If Regions Bank wants to maintain its desired reserve ratio in 2008, it will

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Regions Bank's reserves should decrease because the deposits have decreased, and to maintain the same reserve ratio, the reserves should be proportional to the new deposit amount.

In September 2007, Regions Bank Held $3 Million in Reserves