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

Question

Jasmin Mann

Social Studies

11 October, 20:43

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

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Answers (1)

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Bryanna Murphy · Answer 1

Answer:56

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