Detailed Explanation:

✅ Statement 1 – Correct: When the Central Bank purchases government securities from the public, it pays with newly created money, directly injecting liquidity and increasing money supply.

❌ Statement 2 – Incorrect: When the public deposits currency in commercial banks, no new money is created; it merely shifts from cash in hand to bank deposits, keeping total money supply unchanged.

✅ Statement 3 – Correct: When the government borrows from the Central Bank, the Central Bank creates new money (monetization of deficit), directly expanding money supply in the economy.

❌ Statement 4 – Incorrect: When the Central Bank sells government securities to the public, it absorbs money from circulation in exchange for securities, thereby reducing money supply.