Answer to Question #62712 in Macroeconomics for isabel Diaz
The table shows a bank balance sheet. The desired ratio on the deposits is 5 %. There is no currency drain. What is the quantity of loans and the quantity of total deposit when the bank has no excess reverses.
reverses at the Fed= 25 checkabledeposits=105 cash in vault=10 securities= 60 saving deposits=95 loans= 105
If the bank has no excess reverses, then the quantity of loans is L = reserves + cash in vault + securities + loans = 25 + 10 + 60 + 105 = 200 and the quantity of total deposit is D = checkable deposits + saving deposits = 105 + 95 = 200.
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