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18. Suppose the simplified balance sheet shown below is for the entire banking system. Bank Balance Sheet + Assets Liabi Reserves $ 300 000 Demand

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18. Suppose the simplified balance sheet shown below is for the entire banking system. Bank Balance Sheet + Assets Liabi Reserves $ 300 000 Demand deposits Loans 1 200 000 Buildings 500 000 Capital Total Assets $2 000 000 Total Liabilities and Capital If the desired reserve ratio is 15 percent, how much in excess reserves does the banking system have? If the banking system was to loan out those excess reserves, what is the potential expansion in demand deposits? Redesign the above balance sheet to show how it would look after this amount has been loaned.Bank Balance Sheet Assets Liabilities Reserves $ 300 000 Demand deposits $1 500 000 Loans 1 200 000 Buildings 500 000 Capital 500 000 Total Assets $2 000 000 Total Liabilities $2 000 000 and Capital

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