Answer to Question 1
If the required reserve ratio is 10 percent, then a bank must hold 10 percent of its deposits as reserves. Therefore required reserves equal 0.1 100,000 = 10,000. This bank has 4,000 in excess reserves (14,000 - 10,000 or 4,000 ). This is the maximum that the bank can loan out.
Answer to Question 2
At point J, planned aggregate expenditure is greater than GDP.
At point K, planned aggregate expenditure is equal to GDP.
At point L, planned aggregate expenditure is less than GDP.