Consider a country that has a local currency known as the dollar and its money supply is $1,500 million, and its domestic credit is equal to $1,000 million in the year 2019. The country maintains a fixed exchange rate system, the central bank monetizes any government budget deficit, and prices are sticky.

1. Now, suppose the government unexpectedly runs a $200 million deficit in the year 2020 and the money supply is unchanged. Illustrate this change in a graph. What is the new level of reserves?