1. In the following, assume that the required reserve ratio is 5%. a. With T-Accounts (like the ones below), show the immediate effect of a $1000 Open Market Purchase by the Fed from a member of the public who deposits the Fed's payment into a checking account at the AAA Bank. [4 points] AAA Bank Fed Assets Liabilities Assets Liabilities b. After the new deposit, what is AAA Bank's reserve position (how have their required and excess reserves changed)? [4 points]c. Assume that banks aim to hold no excess reserves. The AAA bank responds to the change in its reserve position in part (b) by maximizing its loan portfolio. Under this assumption, show AAA's T-Account after it has fully adjusted to the change in its reserve position. Explain what actions occurred that caused the balance sheet to change. [4 points] AAA Bank Assets Liabilities d. Assume that the non-bank public holds no physical currency (and banks hold no excess reserves). After the banking system has fully adjusted to the initial deposit what will be the total impact of the open market purchase on the money supply? Explain your answer (including any relevant calculations)--do not show it in T-accounts. [4 points] e. Now assume that the public does hold some currency, along with checkable deposits, and that banks hold some excess reserves. Specifically, assume there is $100,000 of currency in circulation, $1 million of checkable deposits, and $300,000 of excess reserves: In this scenario, what will be the total impact of the open market purchase on the money supply, after the banking system has fully adjusted to the initial deposit? Explain your answer (including any relevant calculations)-do not show it in T-accounts. [4 points]