10. In the SHORT RUN Liquidity Preference Curve chart below assume that the Fed has decided on $10 Bill money supply, Draw the Monoy Supply Curve. Then, draw a demand curve assuming that the equilibrium raro is 5% (the slope of the demand curve is up to you). Liquidity Preference Curve 021 02 0.15 interest rate 01 DOS D 1.2.3.156.7 8 9 10 11 12 13 15 16 17 18 19 20 Quantity of Money (s B. a. Now, use the chart to explain what happens when the Fed conducts Open Market Sales. (Show the movement in the chart and explain the transmission mechanism). b. What if it conducts Open Market Purchases 7 (Show tho movement in the chart and explain the transmission mechanism). c. Explain the Fed's trade off of Inflation versus Uteroploymom 10. In the SHORT RUN Liquidity Preference Curve chart below assume that the Fed has decided on $10 Bill money supply, Draw the Monoy Supply Curve. Then, draw a demand curve assuming that the equilibrium raro is 5% (the slope of the demand curve is up to you). Liquidity Preference Curve 021 02 0.15 interest rate 01 DOS D 1.2.3.156.7 8 9 10 11 12 13 15 16 17 18 19 20 Quantity of Money (s B. a. Now, use the chart to explain what happens when the Fed conducts Open Market Sales. (Show the movement in the chart and explain the transmission mechanism). b. What if it conducts Open Market Purchases 7 (Show tho movement in the chart and explain the transmission mechanism). c. Explain the Fed's trade off of Inflation versus Uteroploymom