Please show were the Equil goes on graph

The following graph shows the money demand curve, MD, and the money supply curve, MS, for an economy. In this case, the money supply is at $21 billion. On the following the graph, use the grey point (star symbol) to indicate the equilibrium interest rate. MS 10 Equilibrium INTEREST RATE (Percent) MD 0 0 3 6 9 12 15 18 21 24 27 30 QUANTITY OF MONEY (Billions of Dollars)Suppose that Best National Bank currently has $125,000 in checkahle deposits and $0?,500 in outstanding loans. The Federal Reserve has set the reserve requirement at 20%. Using these values, fill in the emptv cells for reserves, required reserves; and excess reserves in the following table. Best National Reserves Required Reserves Excess Reserves (Dollars) (Dollars) (Dollars) Suppose First Main Street Bank, Second Republic Bank, and Third Fidelity Bank all have zero excess reserves. The required reserve ratio is 20%. The Federal Reserve buys a government bond worth $750,000 from Rajiv, a customer of First Main Street Bank. He deposits the money into his checking account at First Main Street Bank. Complete the following table to reflect any changes in First Main Street Bank's balance sheet (before the bank makes any new loans). Assets Liabilities Complete the following table to show the effects of the new deposit on excess and required reserves, assuming a required reserve ratio of 20%. Hint: If the change is negative, be sure to enter the value as a negative number. Amount Deposited Change in Excess Reserves Change in Required Reserves (Dollars) (Dollars) (Dollars) 750,000 Now, suppose First Main Street Bank loans out all of its new excess reserves to Maria, who immediately writes a check for the full amount to Kevin. Kevin then immediately deposits the funds in his checking account at Second Republic Bank. Then Second Republic Bank lends out all of its new excess reserves to Yakov, who writes a check to Simone, who deposits the money in her account at Third Fidelity Bank. Finally, Third Fidelity lends out all of its new excess reserves to Ana. Fill in the following table to show the effect of this ongoing chain of events at each bank. Enter each answer to the nearest collar,Now, suppose First Main Street Bank loans out all of its new excess reserves to Maria, who immediately writes a check for the full amount to Kevin. Kevin then immediately deposits the funds in his checking account at Second Republic Bank. Then Second Republic Bank lends out all of its new excess reserves to Yakov, who writes a check to Simone, who deposits the money in her account at Third Fidelity Bank. Finally, Third Fidelity lends out all of its new excess reserves to Ana. Fill in the following table to show the effect of this ongoing chain of events at each bank. Enter each answer to the nearest dollar. Increase in Checkable Deposits Increase in Required Reserves Increase in Loans (Dollars) (Dollars) (Dollars) First Main Street Bank 750,000 Second Republic Bank Third Fidelity Bank Assume this process continues, with each successive loan deposited into a checking account and no banks keeping any excess reserves. Under these assumptions, the $750,000 injection into the money supply results in an overall increase of in checkable deposits.Assume that the following balance sheet portrays the state of the banking system. The banks currently have no excess reserves. Assets Liabilities and Net Worth (Billions of Dollars) Total reserves 5 Checkable deposits 100 Loans 45 Securities 50 Total 100 Total 100 What is the required reserve ratio? O 25% O 40% O 5% O 10% Suppose that the Federal Reserve (the "Fed") buys $8 million of bonds from a bond dealer, who immediately deposits the funds in her checking account. What is the initial impact of this transaction? O The banking system's holdings of securities fall by $8 million, and the banking system's total reserves rise by $8 million. O Checkable deposits rise by $8 million, and the banking system's holdings of securities rise by $8 million. O The banking system's holdings of securities rise by $8 million, and the banking system's total reserves fall by $8 million. O Checkable deposits rise by $8 million, and the banking system's total reserves rise by $8 million. As a result of the Fed's purchase of $8 million of securities, checkable deposits in the banking system can potentially by as much asAssume that banks do not hold excess reserves and that households do not held currency, so the only form of money is checkable deposits. To simplify the analysis, suppose the banking system has total reserves of $100. Determine the money multiplier and the money supply for each reserye requirement listed in the following table. Reserye Requirement Money Supply (Percent) Money Multiplier (Dollars) 15 10 rill lower reserye requirement is associated with a money supply. Suppose the Federal Reserve wants to increase the money supply by $100. Again, you can assume that banks do not hold excess reserves and that households do not hold currency. If the reserye requirement is 10%, the Fed will use openmarket operations to worth of U.S. government bonds. Now, suppose that, rather than immediately lending out all excess reserves, banks begin holding some excess reserves in response to uncertain economic conditions. Specifically, banks increase the percentage of deposits held as reseryes from 10% to 20%. This increase in the reserve ratio causes the multiplier to to . Under these conditions, the Fed would need to worth of U.S. goyernment bonds in order to increase the money supply by $100. Which of the following statements help to explain why, in the real world, the Fed cannot precisely control the money supply? Check all that appi'y. The Fed cannot control whether and to what extent banks hold excess reserves. The Fed cannot prevent banks from lending out reguired reserves. The Fed cannot control the amount of money that households choose to hold as currency. ms interest crate. 2 - mD 2 ] Quantity of money Amount = $12500 0 outstanding loans = 87500 Total reserves= 125000- 87500 = 37500 Required reserves = deposit Ain't x Reseave req. ratio. = 12500 0 * 20 % 2500 0 Incen reserve = Reserve. Req. reserves. = 37506 - 25000 = 12500Asset checkable 7 750000 deposits Amplanation. The fear. nescave buys a gort-hand worth $150600 and deposits the money into his chadoing account at first main street hank the balance sheet has an asset and heability of $ 750000. change in Requried reserve = Art deposited x Ratio of reg. reserve, = 75000 0* 20% = 150 000 change in incer reserves - 750 000- 150000 600000 Increase in Increase in Check able , req. reserva loan deposits Furst main 1500 00 60000 750,000 stocet Bank 120000 4 80060 Second FANS 600 000 Republic Bank 96000 38400 0 Third Fidelyy Bank finding req, reserves and change in exchange reserves Continues with each successive loan deposited in to a checking alc money multiplier =- Reg . reserves 6 .20 Money, supply = 5x 750600= 3750000 Coverall Increase in checkable depositsReq. reserve ratio = ny. of. total labduty = 2 4. of 160 on . ) = 40 x 100 = 25%. 160 Explatthe money is deposited by bond holder in their chicdang account, Thus this Gransuction Increases thi checkcable deposits by of million and rescare too Increase, by an equal amount. (option 3)-Ans. As a result of the fed's purchase of $ million of Securities, checkable deposit in the banking system Can potentially Increase by as much as & m S$ 3.2 billion Emplaireq. Reserve sation = 251. multiplier = 1 - 4: 0:25 change in checkable deposit = $84 tion. 8X 4 = 32 million = 3.2 billion1) multiplier = = 6:67 ( k ) Ratio of 0-15 money supply - K reserves = 6. 67 # 100 = 667 2) multiplies = - . = 10 6.10 money supply = 10 x 100 1000 3) Higher Inverse relation b/w researe, requirementand money supply 4 Buy Buying bunds froom open Marked operation would mean Infusing ) injecting money in to the economy5 ) AM = 1 ratio X JH of reg. reserve 10 0 1 X DH This Increase in the reserve 0.10 ratio causes multiples to AH = roda 10 rise toi. 10. X AH Under these Conditions, the Fed would need to buy $ 20 wooth bonds that will 100 = - X AH 0- 20 Increase the money supply 14 = 20 by $100 Ans. Fed Cannot control whether and where extent bank hold Encess reserves