2.Using the money supply (M1) model developed in class (Topic 12), explain the likely effects on the money supply of the following.Be sure your answer indicates what changes in the model. (5 points each)

a.the U.S. Treasury sells new U.S. bonds at auction and does not spend the proceeds

b.the Fed does an open market purchase of bonds

c.more stores are willing to accept debit or credit cards for transactions

d.the Fed lowers the interest rate it pays banks on reserves

e.banks start paying a higher interest rate on checkable deposits