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B6. (14 marks) Using graphs of the market for reserves, explain and indicate what happens to the cash rate, borrowed reserves, and nonborrowed reserves in

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B6. (14 marks) Using graphs of the market for reserves, explain and indicate what happens to the cash rate, borrowed reserves, and nonborrowed reserves in the following situations, holding everything else constant. Note that different starting positions of the graph can result in different results; your answer must cover all potential scenarios. (a) (10 marks) The RBA decreases the reserve requirement for Australian banks. (b) (4 marks) A potential economic crisis looms, and the RBA decreases the discount rate to prepare to act as a lender of last resort to any commercial banks seeking help

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