2020, the COVID pandemic has spread around the world. a) The US Treasury issues bonds with a 12-month maturity in January 2020 and the US central bank buys $1 billion worth of those bonds. Here and below, assume that public does not hold any currency and that banks maintain a 40% reserve ratio. By how much does the money supply change? Explain the intuition for your answer. b) At the same time, another $1 billion treasury bond issue is purchased by the general public, such as Seattle University, Microsoft Corporation, and Washington State Investment Council (a state pension fund). General public uses funds that are held in the national banking system for this transaction. By how much does the money supply change? Explain the intuition for your answer. c) Is this purchase of bonds by the public saving or investment and why? d) Suppose that public preferences change in favor of holding cash at the start of 2020? Would the estimate of the money supply change you provided in parts (a) and (b) be affected? How and why? e) Once the bonds from parts (a) and (b) mature in 2021, how the money supply would change and why?