Suppose that the Federal Reserve (the "Fed") sells $1.5 million of bonds to a bond dealer, who pays the Fed by writing a check against the funds in her checking account. What is the initial impact of this transaction?

A. Checkable deposits fall by $105 million, and the banking system's total reserves fall by $1.5 million.
B. The banking system?s holdings of securities fall by $1.5 million, and the banking system's total reserves rise by $1.5 million.
C. Checkable deposits fall by $1.5 million, and the banking system's holdings of securities fall by $1.5 million.
D. The banking system's holdings of securities rise by $1.5 million, and the banking system's total reserves fall by $1.5 million.