Please do not use hand writing Q3. Assume that a bank has on its asset side reserves of 1000 and loans of 6000 and on its liability side deposits of 7000. Assume that the required reserve ratio is 10 percent. 1) How much is the bank required to hold as reserves given its deposits of 7000? 2) How much are its excess reserves? 3) By how much can the bank increase its loans?

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