Which of the following statements is NOT true?

A) The supply of money decreases when the Federal Reserve Banks buy government securities from households or businesses.
B) Excess reserves are the amount by which actual reserves exceed required reserves.
C) Commercial banks increase the supply of money when they purchase government bonds from households or businesses.
D) Commercial bank reserves are an asset to commercial banks but a liability to the Federal Reserve Banks.

Federal Reserve Banks

A system of 12 banks in the United States that serve as the central banking system, responsible for implementing monetary policy, regulating banks, and ensuring the stability of the financial system.

Money Supply

The total amount of monetary assets available in an economy at a specific time, including cash, bank deposits, and liquid assets held by the public.

Excess Reserves

The amount of reserves that a bank holds beyond the required minimum, often held in excess of reserve requirements set by central banking authorities.