24. Discuss why a sale of treasuries by the FED will contract the money supply, and why a purchase of treasuries will expand it. In doing so, first discuss the impact on bank reserves. Also, discuss why buying or selling reserves would have a ten-fold impact on the money supply with a 10% reserve requirement. Finally, discuss whether a higher or lower reserve requirement would have a greater effect on the money supply, and explain why. What is the impact of a zero-reserve requirement?