The effectiveness of monetary policy can be seen through the…

The effectiveness of monetary policy can be seen through the supply and demand analysis of the reserves market. a)   Referencing a basic supply and demand graph of the reserves market, briefly explain why the graph is constructed the way it is along with the various interest rates. b)   Starting with a basic graph of the reserve market in which all the interest rates are different –  Explain graphically the changes to the federal funds rate and/or borrowings (if any) if the federal reserve makes an open market purchase.  Identify the type of policy (if any) and discuss its effectiveness? c)   Starting with a supply and demand graph of the reserves market where the federal funds rate and the discount rate are the same –  Suppose the Federal Reserve is trying to entice borrowing and chooses to lower the discount rate.  Explain graphically, the resulting impact to the federal funds rate and/or borrowings if any.  Identify the type of policy and if it was effective.