If the Fed buys government securities from commercial banks in the open market:

A.The Fed gives the securities to the commercial banks and increases the banks’ reserves
B.The Fed gives the securities to the commercial banks and decreases the banks’ reserves
C.Commercial banks give the securities to the Fed, and the Fed decreases the banks’ reserves
D. Commercial banks give the securities to the Fed, and the Fed increases the banks’ reserves

ANSWER:

D. Commercial banks give the securities to the Fed, and the Fed increases the banks’ reserves