1. Explain how each of the following development would affect the supply of money, the demand for money, and the interest rate. Illustrate your answer with diagrams.

1. BNM's securities traders buy securities in open-market operations.
2. An increase in credit-card availability reduces the cash people hold.
3. BNM reduces banks' reserve requirements.
4. Households decide to hold more money to use for holiday shopping.
5. A wave of optimism boosts business investment and expands aggregate demand.