Consider an open market purchase by the Fed of $3 billion of Treasury bonds. What is the

Question:

Consider an open market purchase by the Fed of $3 billion of Treasury bonds. What is the impact of the purchase on the bank from which the Fed bought the securities? Compute the impact on M1 assuming that:
(1) The required reserve ratio is 10 percent;
(2) The bank does not wish to hold excess reserves; and
(3) The public does not wish to hold currency.