1) State whether the following statement is true or false AND explain why: “A decreasein the discount rate will always cause a decrease in the federal reserve funds rate.” Illustrateyour answer graphically using supply and demand model of the market for reserves. Label yourgraphs, axes, lines, and points.2) Using the aggregate demand-aggregate supply model, explain and demonstrategraphically the short-run and long-run effects of an increase in the money supply on aggregateoutput. How did it affect the other aggregate variables such us unemployment rate, price leveland inflation rate? Explain your graphs.