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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The desired reserve ratio can be maintained by decreasing reserves when deposits decrease. If deposits fell from $114 million to $95 million, the bank can reduce its reserves accordingly to maintain the same reserve ratio, without the need to increase reserves or change its lending behavior based on the information provided.

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