Question 1. Consider the market for reserves. Suppose that demand for reserves is given by Rd = 10 202'. Discount rate is id = 10% and interest rate paid on reserves is 6,. = 1% . Non borrowed 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