1. Describe the effect each action below will have on the money supply. Explain your reasoning.


A. The Feds raises the discount rate from 5% to 10%.






B. The required reserve ratio is lowered from 20% to 10%.






C. The Fed sells $5 billion worth of T-bonds on the open market.






D. The Fed buys $5 billion worth of T-bonds on the open market.