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Suppose that the legal reserve ratio set by the Fed is  10%  and that the Fair Bank in Fair dealing, Missouri initially has checkable deposit equal to  $210  and a reserve account of  $70

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Suppose that the legal reserve ratio set by the Fed is  10%  and that the Fair Bank in Fair dealing, Missouri initially has checkable deposit equal to  $210  and a reserve account of  $70. A customer of Fair Bank deposits  $100  into her checking account. Fair Bank loans  80%  of the deposit and places the rest in its reserves at the St. Louis Fed. For simplicity, assume the borrower received the loan as cash. How much does Fair Bank have in excess reserves after the deposit and loan?