Question 5 (20 marks) (a) The balance sheet of the banking system in Country A is given below: Assets Liabilities Reserves $400m Deposits $900m Loans $600m Capital $200m Securities $100m One day, a depositor puts $100m cash into a bank in Country A. On the same day, new loans of $70m are made. If the required reserve ratio is 12%, what is (i) the amount of required reserves? (ii) the amount of excess reserves? (4 marks) (4 marks) (iii) the total amount of new bank loans that can result assuming the banks in Country A do not keep any excess reserve? (4 marks) (b) A politician comments that by using expansionary fiscal policy over a number of years, all structural unemployment will be eliminated. Explain whether this is possible. Suggest some measures that economists think can reduce the amount of structural unemployment. (8 marks)