Q6 (5%) Suppose the Fed sells $2 million of bonds to the First National Bank. What is the effect of this action on r83erves and the monetary base? Use the T-aooount to explain your answer. Federal Reserve System (Fed) Assets | Liabilities Securities $ m... Reserves $ .__.__ Loans $ __ First National Bank Assets | Liabilities+Capital Reserves 3 ...... Deposits $ _.-___ Securities $ ______ Borrowings $ ______ Loans $ ______ Bank capital $ ______ Q7 (10%) 1. Briey explain multiple deposit creation process using the simple model (5%) 2. Suppose banks decide to hold large amounts of excess reserves Using the general model of multiple deposit creation, what is the effect of this behavior on the money multiplier? (5%)