A $1,000 deposit in Acme Bank has increased reserves by $1,000. A loan officer at Acme reasons as follows: “The reserve requirement is 10%. That means that the $1,000 in new reserves can back $10,000...

A $1,000 deposit in Acme Bank has increased reserves by $1,000. A loan officer at Acme reasons as follows: “The reserve requirement is 10%. That means that the $1,000 in new reserves can back $10,000 in checkable deposits. Therefore I’ll loan an additional $10,000.” Is there any problem with the loan officer’s reasoning? Explain.