Use the table, which shows a bank€™s balance sheet, to work Problem. The desired reserve ratio on all deposits is 5 percent and there is no currency drain.

Calculate the bank€™s excess reserves. If the bank uses all of these excess reserves to make a loan, what is the quantity of the loan and the quantity of total deposits after the bank has made the loan?

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Liabilities Assets (millions of dollars) 25 Checkable deposits 15 Savings deposits 60 00 Reserves at the Fed Cash in vault 90 110 Securities Loans