Federal C D Funds Federal Rate Funds Rate 1d RS id RS R,D RD RD NBR R NBR R Federal E Funds Rate 1d RS RDUsing the supply and demand analysis of the market for reserves, determine what happens to the federal funds rate, borrowed reserves, and nonborrowed reserves, holding everything else constant, if: The Fed raises the interest rate on excess reserves above the current equilibrium federal funds rate. O A. The federal funds rate will increase, but nonborrowed reserves and borrowed reserves will not change. O B. The federal funds rate and borrowed reserves will not change, but nonborrowed reserves will decrease. O C. The federal funds rate will decrease, but nonborrowed reserves and borrowed reserves will not change. O D. The federal funds rate will increase, nonborrowed reserves will decrease, and borrowed reserves will not change. Which of the following graphs best describes the situation above? A B Federal Federal Funds Funds Rate Rate RS R RD RD NBR R NBR; NBRI R