show the necessary steps and work.

1. Suppose the simplied balance sheet shown below is for the entire banking system in EconoLand. EconoLand's Bank Balance Sheet Assets Liabilities Reserves $1,800,000 Demand deposits $4,500,000 Loans $2,500,000 Securities $1,250,000 Bank Capital $1,050,000 Total Liabilities 'Ibtal Assets $5,550,000 and Capital $5,550,000 (a) (2 points) 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 maximum potential expansion in demand deposits? (b) (2 points) Redesign the above Tacoount to show how it would look after this amount has been loaned (indicate new loans/ new deposits). (c) (3 points) In reality, most banks hold excess reserves to allow for depositors to withdrawal money as needed. If the banks maintain an average of 3 percent extra in excess reserves (Le. 18% for required and excess), how does that change the maximum potential exapansion in demand deposits? What does the new Taccount look like (indicate new loansew deposits)? (d) (4 points) What is the leverage ratio currently (use information from your part c answer)? How would the leverage ratio change if there was a 9% drop in the value of Securities and Loans (hint: think about what happens to Bank Capital)? If EconoLand is following the Basel III requirements is there cause for concern