Part 2. (80 points) Suppose that the total holdings of banks in the U.S. were as follows: a} 13) required reserves = $45 million excess reserves = $15 million deposits = $750 million loans = $600 million Treasuiy bonds = $90 million Draw a T-account and show that the balance sheet balances if these are the only assets and liabilities. What happens to each of these values if banks reduce their holdings of Treasury bonds by $77.5 million and the central bank changes the reserve requirement ratio to 5%? Illustrate your answer with a new T- account. Assume that people hold no currency. How much does the money supply change by if banks use their excess reserves to make loans? Draw a new T-account to illustrate your answer to part (c). 1What could be a reasomis) that the actual money supply change is different from your answer to part (c)? In your answer, please state if the money supply change could be lower or higher, and why. Illustrate the impact of the money supply change that you calculated in part (c) using IS-LM and AD-AS diagrams. Make sure to label all axes and curves and write equations for each of the curves. Label the initial equilibrium {1) and new equilibrium (2). Describe how the new equilibrium is different 'om the old one. What is the intuition for your result? Note: tfyou are not sure about your answer to part (c), make an assumption about the change of the money supply, tfany. write it down, and use it to answer part 0")