A) Draw the money market graph. B) On the graph that you d…
A) Draw the money market graph. B) On the graph that you drew for part a, show the change in the money market graph if aggregate demand increases. C) Now, on the same graph, show the change as a result of contractionary monetary policy (assuming a limited reserve system.) D) Assuming a ample reserve system, draw the reserve market, making sure to label the discount rate and the interest on reserves rate. E) Assume that the country wants to enact contractionary monetary policy in ample reserve system. Draw the change on your graph in part D after the contractionary monetary policy is implemented. F) Draw the Loanable Funds graph. G) Assume that the government enacts policy that incentivizes savings by the public. Show the change on your graph in part F.