Consider an economy with the following: the required reserve ratio is 9 percent, currency in circulation is $660 billion, the amount of checkable deposits is $985 billion, and the excess reserves are $19.7 billion. (a): Compute the money supply (MI), the currency deposit ration (c), the excess reserve ratio (e), and the money multiplier (m). (b): Suppose the central bank carried out an open market purchase of bonds from commercial banks equal to $1000 billion. What is the effect of this action on the money supply (M1)? Assume the ratios ( r,c, e) computed in part (a) remain steady. Suppose currently in country XY the interbank rate (federal funds rate) is 2.5% as set by the current demand and supply in the market for reserves. The discount rate is set at 4.5%. The central bank pays 1.0% interest on reserves held by commercial banks. The current required reserve ratio is 18%, which commercial banks complain is too high. (a). Based on the above information provided, sketch a well labeled diagram of the market for reserves to show the current equilibrium position (b). Suppose the central bank wishes to reduce the required reserve ratio (say to 10% ) but wants to keep the interbank rate at 2.5%. Briefly discuss how (and show in separate market for reserves diagrams) how the central bank could use open market operations to ensure the interbank rate remains at 2.5%. Be brief but specific