Other Things Being Equal, When the Fed Buys U

Multiple Choice

Other things being equal, when the Fed buys U.S. government securities

A) the U.S. Treasury must immediately issue new securities to replace the securities that the Fed has removed from the market.
B) the Fed's total assets and total liabilities immediately expand by exactly the amount of the Fed's purchase.
C) the quantity of deposits in the U.S. banking system expands by less than the amount of the Fed's purchase.
D) the quantity of paper currency and coins in circulation expands by more than the amount of the Fed's purchase.