1. Use supply-and-demand graphs of the federal funds market in a corridor system to analyze each the following situations. Be sure that your graphs clearly show changes in the equilibrium federal funds rate, changes in the equilibrium level of reserves, and any shifts in the demand and supply curves. a. Suppose that the Fed decides to increase its target for the funds rate from 2% to 2.25% while also increasing the discount rate from 2.5% to 2.75%. Show how the Fed can use open-market operations to bring about a higher equilibrium federal funds rate. Here, you may assume that the interest rate on reserve balances is 1.5% b. Suppose instead that banks increase their demand for reserves. Show how the Fed can offset this change through open-market operations in order to keep the equilibrium federal funds rate unchanged at 2%.

For distract driving

A fruit stand owner rents a stall at the market for $255$⁢255. Each month, the owner spends $295$⁢295 for an accountant’s services and $695$⁢695 on fresh fruit. The fruit stand sells 135135 kilograms of fruit monthly at a price of $8$⁢8 per kilogram.   Step 1 of 2:  Calculate the fruit stand’s profit or loss. Write the exact answer; do not round. Use a minus sign to show losses if necessary.

Consider the following data on a firm: Number of Units Sold Total Revenue (£'s) 10 20 30 40 50 60 70 100 180 240 280 300 300 280 Fixed Costs are £100, Variable costs are constant at £3 per (i) Write a table showing the price and quantity sold. (ii) Calculate the profit maximising output of the firm (iii) What are the profits at the profit maximising output? (v) unit produced. (iv) What is the average variable cost at the profit maximising output? What is the arc price elasticity of demand between 40 and 50 units?