The statement, purchase of bonds from the public decreases the lending ability of the commercial banking system, is false.
The purchase of bonds from the public increases the lending ability of the commercial banking system. Purchases of bonds from the public increase actual reserves, but also increase checkable deposits.
So here, some of the checkable deposits must be kept as legal reserves, so the commercial banking system has fewer excess reserves to lend out. Despite this difference the end result is the same amount of increase in the money supply.
Hence, bank lending increases the money supply by creating additional demand deposits.
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