The demand and supply curve for one year discount bonds with a face value of N$1050 are represented by the following equations: B^d:Price= -0.8 Qunatity+1160 B^S:Price=Quantity+720 Suppose that, as a result of monetary policy actions, the Bank of Namibia sells 90 bonds that it holds. Assume that bond demand and money demand held are constant.

1)How does the Bank of Namibia policy affect the bond supply equation? (5)

2)Calculate the effect on the equilibrium interest rate in this market, as a result of the Bank of Namibia 's policy action. (5)