The table shows a​ bank’s balance sheet. The

desired reserve ratio on all deposits is 1

1 percent. There is no currency drain.

Calculate the​ bank’s excess reserves. If the bank uses all of these 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?

Assets    

Liabilities

  ​ (millions of​ dollars)

Reserves at the Fed

40

40

Checkable deposits

110

110

Cash in vault

5

5

Savings deposits

60

60

Securities

40

40

Loans

85

85

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