Final answer:
A commercial bank's purchase of government securities results in interest-earning assets for the bank and can lead to an increase in the money supply due to the expansion of bank reserves.
Step-by-step explanation:
When considering the true statements about a commercial bank's buying government securities from the public, we need to understand the implications on the money supply. When a commercial bank purchases government securities, these are typically interest-bearing assets, meaning statement A is correct that the securities earn interest. On the other hand, statement B is not accurate because money is not destroyed; rather, it is transferred from the bank to the sellers of the securities. As for statement C, it's incorrect because government securities generally come with interest. Lastly, regarding statement D, it implies that new money is created, which is true to the extent that the commercial bank's purchase of securities can increase the reserves in the banking system, thus potentially increasing the money supply through the money multiplier effect.