Suppose the Fed purchases $5,000 in U.S. government securities from the Last National Bank and the Last National Bank's account at the Federal Reserve district bank increases by $5,000 . Which of the following is a result of this transaction?
a. The Last National Bank's balance sheet shows a change in the composition of its assets.
b. Both the Last National Bank's assets and its liabilities
rise by $5,000.
c. Both the Fed's assets and its liabilities fall by $5,000.
d. Only the Fed's liabilities change, while its assets remain unchanged.
e. This transaction decreases the money supply.
b
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