If the required reserve ratio (RRR)is 10 percent and the Fed sells a $5,000 bond to an individual who pays for it with a check,the money supply will

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When the Fed sells a $5,000 bond to an individual, the individual's account at their bank will be debited for $5,000, which reduces the bank's reserves. Since the required reserve ratio is 10%, the bank is required to hold $500 ($5,000 x 10%) in reserve. Therefore, the money supply will decrease by $5,000 (the amount of the bond sale) minus $500 (the new required reserve), which equals $4,500.

If the Required Reserve Ratio (RRR)is 10 Percent and the Fed