If the required reserve ratio is 10 percent and the Fed buys a $10,000 security from a depository institution that currently has no excess reserves, the money supply _____

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When the Fed buys a $10,000 security from a depository institution, it injects $10,000 into the banking system. With a 10 percent reserve requirement, banks can lend out 90% of deposits. This initial $10,000 can theoretically support up to $100,000 in new money creation through the money multiplier effect, as each dollar deposited can be lent out multiple times, minus the reserve requirement.

If the Required Reserve Ratio Is 10 Percent and the Fed