Question

Suppose that the legal reserve ratio sit by the Fed is 10% and that the fair playing in fair dealing Missouri initially has checkable deposit equal to $240 and a reserved account of $70

Answer 1

Answer:56

Step-by-step explanation:

Step 1 :Calculate the required reserve

Required reserve =(240+100)*10%=34

Step 2 :Calculate the reserve held by bank

(70+100)*20%=90

Step 3 :Calculate the excess reserve which is Required reserve- reserve held by bank

=90-34 =56