suppose the federal reserve buys $400,000 worth of securities from the securities dealers on the open market. if the reserve requirement is 20% and the banks hold no excess reserves, what will happen to the total money supply? suppose the federal reserve buys $400,000 worth of securities from the securities dealers on the open market. if the reserve requirement is 20% and the banks hold no excess reserves, what will happen to the total money supply? it will expand by $2,000,000. it will expand by $800,000. it will be unchanged. it will contract by $800,000. it will contract by $2,000,000.