Assume all money is held in the form of currency. Assume central bank money (H) is initially equal to $100 million. Now suppose the Fed conducts an open market purchase of government bonds equal to $10 million. Explain the effect of this action on:
(a) the Fed’s balance sheet (show changes only)
(b) the price of government bonds
(c) the interest rate on government bonds
(d) the money demand curve
(e) central bank money (H)
(f) the money supply curve