A) In 2008, the Federal Reserve began paying interest on reserves held by banks.The interest rate they paid was greater

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A) In 2008, the Federal Reserve began paying interest onreserves held by banks.The interest rate they paid was greater thanthe federal funds rate. the interest rate banks receive fromloaning their excess reserves to other banks.What effect didthispolicy have on the reserve-deposit ratio? Explain youranswer.(5pts)B) On a graph, use the classical AS-AD model with misperceptionstheory to analyze how the economy would respond in the short-runand long-run in response to the change in the reserve-deposit ratiofrom partA,assuming that the change to the reserve-deposit ratiowas unanticipated and that the Federal Reserve does nothing tochange the monetary base?What happens in the short-run and thelong-run to output and the aggregate price level in the short-runand the long-run?(10pts)(c) Explain how. if at all, your answer to B would change if weassumed that the change to the reserve-deposit ratio wasanticipated rather than unanticipated.(5pts)