QUESTION 43 If the reserve ratio is 2 percent, banks do not hold excess reserves, and people do not hold currency, then when the Fed purchases $10 million worth of government bonds, bank reserves O a. increase by $10 million and the money supply eventually increases by $20 million. b. increase by $10 million and the money supply eventually increases by $500 million. O c. decrease by $10 million and the money supply eventually decreases by $20 million. O d. decrease by $10 million and the money supply eventually decreases by $500 million