What happens when the money supply increases? when the money supply increases the interest rate increases (B) when the money supply increases all households have less money when the money supply increases the interest rate decreases when the money supply increases the business sector will spend less on investments Question 10 Assume the Central Bank buys $400K in US Treasury Bonds from corporations and the households. Also assume that the required ratio is .15 and the currency drain/currency ratio (how much people like to hold in cash rather than in their banks) is .12, then how much did the money supply increase or decrease? (hint - keep no more than 3 decimal places in your money multiplier and select the answer that comes closest) 1,303,600 (B) 1,303,600 (C) 1,659,200 (D) 11,733,200