Explain how each of the following developments would affect the supply of money, the demand for

money, and the interest rate. Illustrate your answers with diagrams.

a. The Fed's bond traders buy bonds in open-market operations.

b. An increase in credit-card availability reduces the amount of cash people want to hold.

c. Households decide to hold more money to use for holiday shopping.

d. A wave of optimism boosts business investment and expands aggregate demand.

e. After a rash of pick pocketing, people decide to hold less currency.