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Question: the following graph depicts us central banks total assets and...

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The following graph depicts US central bank’s total assets and excess reserves of banks. Excess Reserves of Depository Institutions -All Federal Reserve Banks-Total Assets, Eliminations from consolidation 5 Mil 4 Mil 3 Mil 2 Mil 1 Mil 0 -1 Mil 2008 2010 2012 2014 Shaded areas indicate US recessions - 2014 research.stlouisfed.org a) Use the above graph to determine what kind of interventions the central bank undertook. (Hint: Depict the change in a central bank’s balance sheet.)

b) Depict this intervention in the supply and demand diagram for Reserves (US equivalent of ESF) to determine the impact on the federal funds rate (US equivalent of the cash rate).

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