3. Using the money supply (M1) model developed in class, explainthe likely effects on the money supply of the following. Be sureyour answer indicates what changes in the model. (4 pointseach)
a. the U.S. Treasury sells new U.S. bonds at auction and doesnot spend the proceeds
b. more stores are willing to accept debit or credit cards fortransactions
c. banks start paying a higher interest rate on checkabledeposits
