Question: the following graph depicts us central banks total assets and...
Question details
The following graph depicts US central bank’s total assets and
excess reserves of banks. 
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).
Solution by an expert tutor
