If the Fed buys $100 in securities from a commercial bank,the

Name: If the Fed buys $100 in securities from a commercial bank,the
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When the Fed buys securities from a commercial bank, it credits the bank's reserve account at the Fed with $100. This increases the bank's reserves and allows it to lend more, increasing the quantity of money in circulation. The Fed's assets do not necessarily decrease, as it is using new money creation to make the purchase.

If the Fed Buys $100 in Securities from a Commercial