In conducting monetary policy, the Federal Open Market Committee (FOMC) targets a Federal funds rate and the Federal Reserve Bank of New York uses open-market operations to achieve and maintain the target rate. Suppose that the following graph shows the demand for Federal funds. Use the orange line (square symbols) to plot the supply of Federal funds (also called "the supply of excess reserves") when the FOMC targets a Federal funds rate of 4%. Fed Funds Supply 0 20 40 60 80 100 6 5 4 3 2 1 0 FEDERAL FUNDS RATE (Percent) QUANTITY OF RESERVES (Billions of dollars) D f Suppose that the FOMC decides to raise its target for the Federal funds rate from 4% to 4.5%. To raise the Federal funds rate, the Federal Reserve Bank of New York will use open market operations to banks and the public, causing the quantity of reserves in the banking system to . This is known as monetary policy, and such policy will normally lead to in aggregate demand