What Happens to the Fed's Balance Sheet When It Buys

question 162

Multiple Choice

What happens to the Fed's balance sheet when it buys $10 billion in government securities?

• A)The left-hand side of the Fed's balance sheet increases by $10 billion.
• B)The left-hand side of the Fed's balance sheet decreases by $10 billion.
• C)The right-hand side of the Fed's balance sheet decreases by $10 billion.
• D)Both the right-hand and left-hand sides of the Fed's balance sheet decrease by $10 billion.
• E)None of these.

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Definitions:

Glycolipids

Compounds composed of carbohydrates covalently bonded to lipids; they play a key role in cell recognition and membrane structure.

Actin Filaments

Thin, flexible fibers that are a major component of the cytoskeleton in cells and play a crucial role in cell movement and shape.

Lipids

A diverse group of organic compounds, including fats, oils, and waxes, that are insoluble in water but soluble in organic solvents.

Emulsification

The process of mixing two immiscible liquids (like oil and water) together to form a stable mixture, often using an emulsifier.