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 pays for the securities by creating a deposit in the commercial bank's reserve account with the Fed. This increases the bank's reserves, allowing it to lend out more money and increasing the money supply. The Fed's assets will not decrease as it has acquired securities, and the quantity of money will not decrease as the bank's reserves and potential for lending have increased.

If the Fed Buys $100 in Securities from a Commercial