Rs = MB = Rd = C + BCRT (equilibrium condition);

BCRT = RR + ER (definition of total bank reserves)

C = 0.25D (currency holdings of the non-bank public)

RR = RRd + RRt [total desired cash reserves against bank deposits]

RRd = 0.05D (desired cash reserves against demand deposits)

RRt = 0.02T (desired cash reserves against term deposits)

T = 0.8D (definition of term deposits)

ER = ER d + ER t [total idle excess reserves held against bank deposits]

ERd = 0.002D(idle excess reserves held against demand deposits)

ERt = 0.001T (idle excess reserves held against term deposits).

Calculate the percentage changes in the equilibrium values of both the narrowly defined and broadly defined money supply if the central bank had used INSTEAD an expansionary unconventional monetary policy by purchasing both private sector and federal government securities in the financial market worth $500 million. Explain and illustrate your answers with the appropriate diagrams, where necessary.