Assume that the required reserve ratio on checkable deposits is 10% and the public's holdings of currency do not change. If reserves in the banking system increase by $1 billion as a result of discount loans of $1 billion, and checkable deposits increase by $9 billion, why isn't the banking system in equilibrium? A. There are $100 billion of excess reserves that banks will seek to lend out. B. There are $1 billion of excess reserves that banks will seek to lend out. C. There are $100 million of excess reserves that banks will seek to lend out. D. The banking system is in equilibrium. Show the T-account for the banking system in equilibrium. Banking System Liabilities Assets Reserves +$1 bilion Discount loans +$1 billion Loans $10 bilion Checkable deposits *$10 billion Assume that the required reserve ratio on checkable deposits is 10% and the public's holdings of currency do not change. If reserves in the banking system increase by $1 billion as a result of discount loans of $1 billion, and checkable deposits increase by $9 billion, why isn't the banking system in equilibrium? A. There are $100 billion of excess reserves that banks will seek to lend out. B. There are $1 billion of excess reserves that banks will seek to lend out. C. There are $100 million of excess reserves that banks will seek to lend out. D. The banking system is in equilibrium. Show the T-account for the banking system in equilibrium. Banking System Liabilities Assets Reserves +$1 bilion Discount loans +$1 billion Loans $10 bilion Checkable deposits *$10 billion