Explain how each of the following events affects the monetary base, the money multiplier, and the money supply.

a. The Federal Reserve buys bonds in an openmarket operation.

b. The Fed increases the interest rate it pays banks for holding reserves.

c. The Fed reduces its lending to banks through its Term Auction Facility.

d. Rumors about a computer virus attack on ATM machines increase the amount of money people hold as currency rather than demand deposits.

e. The Fed flies a helicopter over 5th Avenue in New York City and drops newly printed

$100 bills.