10. Assume that the federal funds market is in equilibrium with the vertical segment of the

supply curve intersecting the negatively sloped segment of the demand curve and the

money market is in equilibrium with a vertical money supply curve interesting a

negatively-sloped demand curve for money. Represent the following events in both

markets, explain whether they cause a situation of excess demand or excess supply to

arise, and the adjustment process to a new equilibrium that ensures.

a) The Federal Reserve implements an expansionary open-market policy.

b) The Federal Reserve implements a contractionary open-market policy.

c) The Federal Reserve increases reserve requirements.

d) The Federal Reserve decreases reserve requirements.

e) The Federal Reserve increases the discount rate.

f) The Federal Reserve decreases the discount rate.