Final answer:
The commercial bank's reserves decrease when the Fed sells a security to the bank because the bank uses the reserves to pay for the bonds, leading to an adjustment in the bank's balance sheet by reducing loans to maintain required reserves.
Step-by-step explanation:
When the Federal Reserve (Fed) sells a security to a commercial bank, the reserves of the bank decrease. As the bank purchases the bonds, it pays the Fed with its reserves, thus the money that was once part of the reserves is now exchanged for the bonds, lowering the total reserve amount. This action also causes the bank to adjust its balance sheet, likely by reducing its loans, to maintain its required reserves, this is in line with the bank's need to hold a certain amount in reserves. Consequently, this sale by the Fed is an open market operation that has an immediate effect of reducing the bank's reserves and indirectly reduces the money supply.