Question: d) (20 points total: 10 points for diagram and 10 points for explanation) Now let's pretend that we were in a new regime (as they

d) (20 points total: 10 points for diagram and 10 points for explanation) Now let's pretend that we were in a new regime (as they are now) where the Fed sets the interest rate they pay on reserves at 25 basis points below the federal funds target and the discount rate set 25 basis points above the federal funds target. In the space below, redraw the reserve market diagram accounting for this new regime. Make sure you label points A, B, and C under this new and current regime. Explain in detail as to why the implied (actual) funds rate is different in this new regime relative to the old regime as in 1.a)

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