graph of the demand and supply of reserves

 
graph of the demand and supply of reserves

If the Fed uses the federal funds rate as a policy instrument, will increases in the demand for reserves lead to an increase or a decrease in the level of reserves? If the Fed uses the level of reserves as a policy instrument, will increases in the demand for reserves lead to an increase or a decrease in the federal funds rate? Support your answers with a graph of the demand and supply of reserves.
graph of the demand and supply of reserves