Explain how each of the following events affects the monetary base, the money multiplier   and the money supply, ceteris paribus. a. The Federal Reserve buys bonds in an open market operation (assume that banks keep the same proportion of deposits as reserves and the currency-deposit ratio remains the same b. The Fed increases the interest rate it pays banks for holding reserves (assume that the currency-deposit ratio remains the same). c. The Fed flies a helicopter over 5th Avenue in New York City and drops newly printed $100 bills and people keep that cash rather than depositing it.

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