the dollar volume of checking account deposits in banks at a point in time). MD = The volume of money demanded by households and rms at a point it time. B5 = The sum of the dollar face values of all bonds held by all households, non-nancial rms, and banks at a point in time. BD= The sum of the total dollar face values of all bonds demanded by all households, non- nancial rms, and commercial banks at a point. in time. Interest Rate = The current market interest rate earned by holding bonds. P3 = The current market price of bonds. A. In recent months, the FED has been conducting a more restrictive monetary policy to reign in an acceleration of price ination. Illustrate on the above diagrams the impact of the FED's policy. B. What is the logic of this FED policy? How does it think the policy will curb ination