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# If a checking account has an interest rate of 1% and a government Treasury bill has an interest rate of 3%, the opportunity cost of holding cash in...

1. If a checking account has an interest rate of 1% and a government Treasury bill has an interest rate of 3%, the opportunity cost of holding cash in your wallet is:

A. zero.

B. 0.02%.

C. 1%.

D. 2%.

**E. 3%. **

2. Suppose the economy is currently suffering from a very high rate of unemployment caused by a decrease in consumer confidence in the economy.

a. In a correctly labeled graph, show equilibrium in the money market.

b. In a correctly labeled AD/AS graph, show the current short-run equilibrium in the macroeconomy.

c. What monetary policy tool could the Fed undertake to correct the problem?

d. In your graph from part (a), show the impact of this monetary policy in the money market and on the equilibrium interest rate.

e. In your graph from part (b), show the impact of this monetary policy on real GDP and the price level.

f. Explain how the open-market operation impacted output and price level.

Please help me on the graphing section..... (topics are related to money market, interest rate and monetary policy)