Final answer:
When the Federal Reserve purchases securities from a bank, the bank's reserves increase while its deposits remain unchanged. This influx of funds from the central bank can eventually lead to an increased money supply in the economy.
Step-by-step explanation:
When the Federal Reserve (the Fed) buys securities from a bank, the bank's reserves increase but its deposits do not change. In contrast to the statement given where a bank must reduce loans when buying securities to maintain reserve requirements, this situation involves the central bank's actions. According to the principles of central banking operations, when the Fed purchases securities, it pays the bank, which in turn increases the bank's reserves. This infusion of money into the banking system allows banks to have more funds available for lending, potentially expanding the money supply in the economy. It is important to remember that this transaction does not directly affect the deposit amounts held by the bank's customers. Therefore, the money flowing from the central bank results in an increase in the bank's reserves, and this action can ultimately lead to an increased money supply in the broader economy without any immediate change in the bank's deposit levels.