Suppose the reserve requirement for the United States is $12\%.$

Instructions: Round your answers to the nearest whole number.

a$.$ Suppose the Federal Reserve wants to increase the money supply. What should it do to accomplish this goal?

The Fed could make an

of $$40$ billion, resulting in a total increase in the money supply of $

billion.

b$.$ Now suppose the Fed wants to decrease the money supply. What should it do to accomplish this goal?

The Fed could make an

$($Click to select$)$

of $$30$ billion, resulting in a total decrease in the money supply of $

billion.