Question 1: Assume that the balance sheet of Fifth National Bank has the following items: reservesof $ 1,000, a loan it issued out of $6,000 and checkable deposits of $7,000.Assume that the required reserve ratio is 10 percent.

a.Show the balance sheet of the bank

b.How much is the bank required to hold as reserves?

c.How much are its excess reserves?

d.By how much can the bank increase its excess loans?

Question 2: Maryland Bank has total reserves of $ 1.5 million and checking deposits of $ 4 million.The reserve requirement is 20%.Determine the required reserves and the excess reserves.How much money is the banking system in MD capable of creating