5. Suppose that the target range for the federal funds rate is 1.5 to 2.0 percent but that the equilibrium federal funds rate is currently 1.70 percent. Assume that the equilibrium federal funds rate falls (rises) by 1 percent for each $120 billion in repo (reverse repo) bond transactions the Fed undertakes. If the Fed wishes to raise the equilibrium federal funds rate up to the top end of the target range, will it initiate repos or reverse repos of bonds to nonbank financial firms? How much will it have to repo or reverse repo? LO16.4