If the Fed Sells $1 Billion of Short-Term Securities Issued

question 67

Multiple Choice

If the Fed sells $1 billion of short-term securities issued by the Bank of Japan and at the same time purchases $1 billion of short-term securities issued by the U.S. Treasury,

• A)the monetary base will decline by $1 billion.
• B)the monetary base will rise by $1 billion.
• C)the Fed has conducted an unsterilized foreign-exchange intervention.
• D)the Fed has conducted a sterilized foreign-exchange intervention.

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Definitions:

Open Sentence

An expression or statement that contains one or more variables, which becomes either true or false when specific values are substituted.

Quantified Existential

A logical expression that asserts the existence of at least one instance of a certain property or classification.

Open Sentence

An algebraic expression that contains at least one variable and becomes either true or false when specific values are substituted for the variables.

Closed Sentence

In logic and mathematics, a statement or expression that is either always true or always false, containing no free variables.