Problem:
Deposits in all financial institutions equal $2 trillion. The total reserves held by these institutions are $240 billion, $100 billion of which is in excess of reserve requirements.
Required:
Question 1: What is the percentage reserve requirement?
Question 2: What would the percentage reserve requirement have to be to maintain the existing amount of reserves ($240 billion) but eliminate excess reserves?
Note: Please explain comprehensively and give step by step solution.