Assuming a required reserve ratio of 20%, answer the following:
ASSETS
Reserves $40,000
Loans $70,000
Securities $50,000
Property $400,000
LIABILITIES + NET WORTH
Checkable deposits $100,000
Stock shares $460,000
a. What is the amount of excess reserves?
b. This bank can safely expand its loans by what amount?
c. By expanding its loans by this amount in part (b), its checkable deposits would expand to what amount (if all loans were made to checking account customers)?