1. We have the following information for an economy. Required Reserve Ratio held by the banks =20% (or 0.2). Banks do not hold any excess reserve. Money multiplier =2.5. Supply of Monetary Base (or Central Bank Money or High Powered Money) =$576 billion. Nominal Income, $Y=$8 trillion. The money demand function is given by Mi =$Y(0.5-41) (a) Calculate the Currency ratio (proportion of money that people hold in the form of currency), c. (Round your answer to two decimal places, so that percentage becomes an integer.). (b) Equating the supply of and demand for Central Bank money, calculate the equilibrium interest rate. (Express interest rate as a percentage, rounded to two decimal places). (c) Equating the overall supply of and demand for money, calculate the equilibrium interest rate. (Express interest rate as a percentage, rounded to two decimal places). (d) Suppose the Fed wishes to reduce the interest rate by 1/2 percentage point (ie., by .005). Calculate the amount by which the Fed should adjust the overall supply of money. Determine the amount and the nature of the Open Market Operations that the Fed will need to undertake to accomplish this goal. Specifically calculate the amount of bond purchase or sale that the Fed will have to undertake. (Round your answer to two decimal places). (e) Calculate the lowest amount of money supply that leads to a liquidity trap. What is the effect of a 5% increase in money supply after that amount