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Use the table, which shows a bank's balance sheet, to solve the following problem. The desired reserve ratio on all deposits is 5 percent and
Use the table, which shows a bank's balance sheet, to solve the following problem. The desired reserve ratio on all deposits is 5 percent and there is no currency drain. Assets Liabilities (millions of dollars) Reserves at the Fed 25 Checkable deposits 90 Cash in vault 15 Savings deposits 110 Securities 60 Loans 100 Calculate the bank's excess reserves. If the bank uses all of the excess reserves to make a loan, what is the quantity of the loan and the quantity of total deposits after the bank has made the loan
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