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In the financial market context, suppose an economy in which the public holds cash worth $ 1,000 and demand deposits worth $ 2,000 and the reserve ratio is 10%

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In the financial market context, suppose an economy in which the public holds cash worth $ 1,000 and demand deposits worth $ 2,000 and the reserve ratio is 10%. Starting from equilibrium, if the central bank buys bonds worth $ 200 (round to 2 decimal places)

A) The money supply decreases by $ 200

B) The money supply increases by $ 200

C) The monetary base decreases by $ 500
D) The money supply increases by $ 500