a) Consider the central bank balance sheet for the country of Riquen that currently has 1,800 million escudos in its money supply 1.100 miliona hich backed by domestic government bonds, the rest is backed by foreign exchange reserves. Assume that Riqueza maintains a fixed exchange rate of 2 escudo per dollar, the foreign interest rate remains unchanged and money demand beste usual form, M/PELITY. Assume prices are sticky, and the central bank keeps domestic credit unchanged whenever possible 110 points) Show Riqueza's central bank balance sheet. Use appropriate units H)Now, suppose that there is an economic downtum in Riqueza, so that income contracts by 10% a) How will the downturn affect the central bank's ability to detend the fed exchange rate? b) How can the central bank of Riqueza maintain pegaher the economic downturn On a new balance sheet show how the downtum affects Riquera central bank d) On a central bank's balance sheet diagram, label the following initial money supply, money supply following the economic downtur initial domestic credit and domestic credit following the downturn, initial reserve of foreign asset and reserve of foreign asset following the economic downturn in Riques a) Consider the central bank balance sheet for the country of Riquen that currently has 1,800 million escudos in its money supply 1.100 miliona hich backed by domestic government bonds, the rest is backed by foreign exchange reserves. Assume that Riqueza maintains a fixed exchange rate of 2 escudo per dollar, the foreign interest rate remains unchanged and money demand beste usual form, M/PELITY. Assume prices are sticky, and the central bank keeps domestic credit unchanged whenever possible 110 points) Show Riqueza's central bank balance sheet. Use appropriate units H)Now, suppose that there is an economic downtum in Riqueza, so that income contracts by 10% a) How will the downturn affect the central bank's ability to detend the fed exchange rate? b) How can the central bank of Riqueza maintain pegaher the economic downturn On a new balance sheet show how the downtum affects Riquera central bank d) On a central bank's balance sheet diagram, label the following initial money supply, money supply following the economic downtur initial domestic credit and domestic credit following the downturn, initial reserve of foreign asset and reserve of foreign asset following the economic downturn in Riques