(Solved): Bank Three currently has $800 million in transactions deposits on its balance sheet. The Federal Rev ...

Bank Three currently has $$\$800$$ million in transaction deposits on its balance cheet. The Federal Reserve has currently set the reserve requirement at 10 percent of transaction deposits. a. If the Federal Reserve decreases the reserve requirement to 8 percent, show the balance sheet of Bank Three and the Federal Reserve System just before and after the full effect of the reserve requirement change. Assume Bank Three wthdraws all excess reserves and gives out loans and that borrowers eventually retum all of these funds to Bank Three in the form of transaction deposits. b. Redo part (a) using a 16 percent reserve requirement. $$?$$ Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Redo part (a) using a 16 percent reserve requirement. (Do not round intermediate calculations. Enter your answers in millions rounded to the nearest dilar amount.)