1. Explain how the following changes affect the Fed Funds market. In each case, draw the appropriate Fed-funds market diagram. Assume the Fed funds rate is initially below the discount rate. a. The Federal reserve sells Treasury bonds to a bank. b. Suppose the Fed reduces the discount rate sharply so that it falls below the initial Fed Funds rate. 0. Suppose mutual funds start to allow unlimited check writing in accounts not subject to reserve requirements. Many bank customers close their checking accounts and open mutual funds accounts. (i). Determine the likely effects if the Fed does not respond. (ii). Determine the likely effects if the Fed stabilizes the Fed funds rate. d. The Fed reduces the required reserve ratio