How to figure out the banks' excess reserves. The table presents the commercial banks' balance sheet (aggregated over all the banks). The desired reserve ratio on all deposits is 10 percent, and there is no currency drain.**Question:**What is the quantity of loans and the quantity of total deposits when the banks have no excess reserves?**Requirement:**Answer to 2 decimal places.**Table Explanation:**The table shows the banks' assets and liabilities in millions of dollars:- **Assets:** - Reserves at the Fed: $30 million - Cash in vault: $5 million - Securities: $40 million - Loans: $115 million- **Liabilities:** - Checkable deposits: $115 million - Savings deposits: $75 million**Conclusion:**The total quantity of loans after the banks have lent all their excess reserves is $ [space to fill] million.

Excess reserves are the excess of money a commercial bank hold with the central bank of country over…

Answered: The table shows the commercial banks'…

ENGR.ECONOMIC ANALYSIS

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ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

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How to figure out the banks' excess reserves.

The table presents the commercial banks' balance sheet (aggregated over all the banks). The desired reserve ratio on all deposits is 10 percent, and there is no currency drain.

**Question:**
What is the quantity of loans and the quantity of total deposits when the banks have no excess reserves?

**Requirement:**
Answer to 2 decimal places.

**Table Explanation:**

The table shows the banks' assets and liabilities in millions of dollars:

- **Assets:**
- Reserves at the Fed: $30 million
- Cash in vault: $5 million
- Securities: $40 million
- Loans: $115 million

- **Liabilities:**
- Checkable deposits: $115 million
- Savings deposits: $75 million

**Conclusion:**
The total quantity of loans after the banks have lent all their excess reserves is $ [space to fill] million.

Definition Definition Capital reserves held by banks or financial institutions over and above the reserves that are required to be maintained by the regulator toward its liabilities and for internal controls. For commercial banks, excess reserve is the amount over the standard reserve as decided by the central bank. These excess reserve funds are available in the form of cash and cash equivalents.

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