Question 1. Consider the market for reserves. Suppose that demand for reserves is given by Rd=1020i. Discount rate is id=10% and interest rate paid on reserves is ir=1%. Nonborrowed reserves are NBR=9.6 a) Plot the graph of market for reserves. b) Find the equilibrium federal funds rate, iff. c) Suppose there is higher demand in the federal funds market, and intersept increased to 12 . What should the FED do to keep the federal funds rate at the initial level? Question 1. Consider the market for reserves. Suppose that demand for reserves is given by Rd=1020i. Discount rate is id=10% and interest rate paid on reserves is ir=1%. Nonborrowed reserves are NBR=9.6 a) Plot the graph of market for reserves. b) Find the equilibrium federal funds rate, iff. c) Suppose there is higher demand in the federal funds market, and intersept increased to 12 . What should the FED do to keep the federal funds rate at the initial level