The Federal Reserve specifies a percentage of checkable deposits that banks hold must hold as reserves (required reserve

[answerhappygod]

The Federal Reserve specifies a percentage of checkable deposits
that banks hold must hold as reserves (required reserves), which is
called the required reserve ratio. Excess reserves are reserves
that banks hold over and above the required reserves and can make
loans. Suppose that Bank A has an increase in checkable deposits of
$100 million and the required reserve is 10%. How much money can
Bank A create by making loans? How much money can the banking
system as a whole create? Show your detailed calculation. What can
you say about the relationship between the required reserve ratio
and money creation? Why do some banks hold a part in excess
reserves instead of loaning all excess reserves out? What are some
other ways that banks may use a portion of their excess
reserves?