Introduction: For each of the questions below, assume the following: At presentthe Federal Reserve of the United States requires banks to keep 20% of their total deposits in reserve. The Fed wishes to target an inflation rate of between 2% and 3%. . America's natural rate of unemployment is believed to be 5% 1. The economy is currently experiencing inflation of 5%. The nominal interest rate is currently 9%. a. Calculate the real interest rate. b. Identify how the Fed could change each of the following to achieve its targeted inflation rate: i. The Discount Rate: li. The Reserve Requirement: C. Which open market operation should the Fed engage in to achieve its goal? Explain the process by which OMO can be used to reduce the rate of inflation. d. On the graphs below, show the effect of the Fed's actions in 1. The Money Market ii. An AD/AS diagram