Sapling Learning Suppose that the legal reserve ratio set by the Fed is 10% and

Question

Sapling Learning Suppose that the legal reserve ratio set by the Fed is 10% and that the Far Bank in Fardealing, Missouri, initially has checkable deposit equal to $210 and a reserve account of $70 A customer of Fair Bank the rest in its reserves at the St. Louis Fed. For simplicity, assume the borrower recelved the loan deposits $100 into her checking account. Fair Bank loans 80% of the deposit and places How much does Fair Bank have in excess reserves after the deposit and loan? Number Place the figures below to represent changes in the accounts of Fair Bank and the Federal Reserve of St. Louis' balance sheets resulting from the deposit and loan $100 +$20 $100 $20 +$80+$10 -$80 $10 Balance Sheet:Fair Bank Balance Sheet Saint Louis Fed Liabilities: $100 Net equity Cash $20 Liabilities: $20 or Property , Then, is a hint avalatel View the hint by clicking on the divider bar again to hide the hint Close p bottom divider batr on the Loans: orreviouGreup &View; Solutione,Check Answer 0 Next ,it

Explanation / Answer

Ans- required reserves =( initially deposit 210+ fair bank deposit100)*10%=$ 31 To represents changes in the account of Fair bank and The Federal reserve of St. Louis the figure is +$80.

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