ank first currently has $700 million in transaction deposits on its balance sheet. the federal reserve has currently set the reserve requirement at 6 percent of transaction deposits. if the federal reserve increases the reserve requirement to 8 percent, show the balance sheet of bank first and the federal reserve system just before and after the full effect of the reserve requirement change. assume bank first withdraws all excess reserves and gives out loans and that borrowers eventually return all of these funds to bank first in the form of transaction deposits.
