Hi I need the answer to this question Thank You 16. In answering the question, you should emphasize the line of reasoning that generated your results; it isnot enough to list the results of your analysis. Include correctly labeled diagrams, if useful or required,in explaining your answer. A correctly labeled diagram must have all axes and curves clearly labeledand must show directional changes.The Federal Reserve can influence the supply ofmoney.a. Assume that the Federal Reserve targets a lower federal funds rate.Page 8 of 9MacroeconomicsUnit 10i. What open market operation can the Federal Reserve use to achieve the lower target?ii. Given your answer to part (a)(i), what will happen to the price of government bonds?b. Using a correctly labeled graph of the money market, show the effect of the open marketoperation from part (a)(i) on the nominal interest rate.c. Assume that the Federal Reserve buys government bonds from commercial banks. Based only onthis transaction, will the level of required reserves in the commercial banks increase, decrease, orremain the same?d. Another monetary policy action involves changing the discount rate. Define the discount rate.

a. I. To lower the federal funds rate the Federal Reserve System must raise the cash supply. this…

16. In answering the question, you should emphasize the line of reasoning that generated your results; it is not enough to list the results of your analysis. Include correctly labeled diagrams, if useful or required, in explaining your answer. A correctly labeled diagram must have all axes and curves clearly labeled and must show directional changes. The Federal Reserve can influence the supply of money. a. Assume that the Federal Reserve targets a lower federal funds rate.