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Can you help me with my homework? Use the figure and supply and demand analysis of the market for reserves to answer the following question

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Can you help me with my homework?

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Use the figure and supply and demand analysis of the market for reserves to answer the following question What would happen to the federal funds rate if it were initially at i;r and there was a switch from deposits into currency (holding everything else constant)? e federal funds rate would stay at E;, . e federal funds rate would increase to E% . e federal funds rate would fall to i~ i e federal funds rate would increase to E)ff 1 The figure is drawn such that the discount rate ; is above the federal funds rate i What would happen to the fe else constant) and the federal funds rate was initially at the discount rate (i;f = iy)? 4 0 =4 o o = eral funds rate if there was a switch from deposits into currency (holding everything e federal funds rate would rise e federal funds rate would fall e federal funds rate would stay at E;, . e outcome cannot be determined. AFederal Funds Rate Quantity of Reserves, R o P &

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