(Solved): The following graph represents the moner market in a hypothetcal econorty. As in the United states, ...

The following graph represents the moner market in a hypothetcal econorty. As in the United states, this econorry has a central bank called the Fed, but unlike in the Unied states; the ecenemy is closed (that is, the econcmy does not interact wah other economies in the world). The money market is currently in equibeium at an intertst rate of \( 3,5 \% \) and a quantify of menty equal to \( \$ 0,4 \) trillian, as indicated by the grey stac, Suppose the Fed announces that it is ralsing its target interest rate by so basis peints, or \( 0.5 \) percentage peint. To do this, the fed will we open. market operations to the money try the pubte. carrect location. flave the biack point colus symbop at the new equibrium incercat cace and quantity of money: Suppese the folowing greph shows the sogregate demand curve for this economy. The Fedi policy of targeting a higher interest rate Shint the curve on the graph to show the general impoct of the fed's new interest rate target on aggregate demand.