Assignment task: Please explain to me whether each of the following events increases or decreases the money supply. Also, please explain to me why the following events increase or decrease the money supply.
Explain whether each of the following events increases or decreases the money supply.
1. After a rash of pick pocketing, people decide to hold less currency.
2. Fearful of bank runs, bankers decide to hold more excess reserves.
3. The FOMC (Federal Open Market Committee ) increases its target for the federal funds rate.