If a member of the nonbank public purchases a government bond from the Federal Reserve with currency,

Select one:

a.the monetary base will fall, but reserves will remain unchanged.

b.the monetary base will fall, but currency in circulation will remain unchanged.

c.the monetary base will remain unchanged, but reserves will rise.

d.the monetary base will remain unchanged, but reserves will fall.

An increase in discount loans by the Fed leads to

Select one:

a.a decline in the money supply.

b.a decline in the monetary base.

c.all of the above.

d.an increase in the money supply.