Consider a $2 billion open market purchase of U.S. Treasury securities by the Federal Reserve.

The Banking System's balance sheet will specifically show:

a. only an increase in liabilities of $2 billion. b.

b. only a decrease in assets of $2 billion.

c. no net change in assets or liabilities, only a change in the composition of assets with securities decreasing and reserves increasing by $2 billion respectively.

d. no net change in assets or liabilities, only a change in the composition of assets with securities increasing and reserves decreasing by $2 billion respectively.

Please explain why the answer is correct.