(Answered) 1 draw and explain shapes of the supply and demand curves

Finance

1. Draw and explain shapes of the supply and demand curves for reserves.

2. Illustrate by sketching the relevant figures,the situation on the market for reserves when:

a. The federal funds rate equals interest rate paid on excess reserves.

b. The federal funds interest rate is below the discount rate.

c. The equilibrium federal funds rate is 3%, the fed increases the interest rate paid on the excess reserves from 1% to 2%

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