Please answer questions 21-30 on the image

B. Short Answers (60pts) Note: You will typically need to explainljustify your answers in this section. 21. (3m) What happens to the Federal Funds Rate if the discount rate (DR) is equal to the interest rate on reserves (IOR) Question 221:0 25: Consider a money market model with the following setup. The central bank money supply is H, where H = $Y. For each dollar the households want to hold c dollars as cash and 1-c dollars as checkable deposiLs. The reservation ratio is 10%. The nominal GDP is equal to real money supply. The money demand function is written as Md = $Y I (02 + i) where $Y is the nominal GDP and i is the interest rate. Answer the following questions by analyzing the money market model 2. (3m) What is the currency demand by the households. Please write it as an expression of the interest rate, i. 23. (Elm) What is the reserve demand by the commercial banks. Please write it as an expression of the interest rate, i. 26.. (am) Recall: central money demand = currency demand by the households + reserve demand by the commercial banks. Use this central money market equilibrium condition to compute the equilibrium interest rate. 25. (apt) How does the equilibrium interest rate change if people hold less cash, i.e. c decreases. Question 26 to 30 Consider an economy that has the following setup: co, c1, I , G, NX, T. Answer the following question by studying the short-run goods market model. 26. (3pt) Write the aggregate goods demand, Z as a function of output Y. 27. (3pt) Use the short-run condition that aggregate goods demand is equal to output Y to compute the equilibrium output for this goods market model. 28. (3pt) Compute the equilibrium consumption. 29. (3pt) Compute the equilibrium household saving. 30. (3pt) What is the equilibrium aggregate saving