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 open-market 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.