Question: How Changes in the Tools of Monetary Policy Affect the fig? 1) Open Market Operations : When I'm-C ifgr-C id (Normal Case) Let's suppose that

How Changes in the Tools of Monetary Policy Affect the fig? 1) Open Market Operations : When I'm-C ifgr-C id (Normal Case) Let's suppose that the initial 1"\"; is between I'm. and id. 1. Please draw the initial market for the reserve graph. Indicate the equilibrium as \"1\". Label all the axis and curves. Let's say there is an Open Market operation sales [bythe Fed} 2. What happens to which curve? Please explain any changes in writing and draw the change in the above graph. Indicate the new equilibrium as II2II. 3. What happens to nonborrowing reserve or borrowed reserve? 4. Therefore, what happens to the monetary base? 5. Base on your answer above, what happens to the money supply intbe economy (M1)

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