If the Fed Sterilizes the Purchase of Foreign Assets

question 22

Multiple Choice

If the Fed sterilizes the purchase of foreign assets,

• A)its assets and liabilities rise by the same amount.
• B)its assets and liabilities fall by the same amount.
• C)the composition of its assets changes, but its liabilities are unaffected.
• D)the composition of its liabilities changes, but its assets are unaffected.

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Definitions:

Epicurus

An ancient Greek philosopher known for his emphasis on simple pleasures, friendship, and the pursuit of happiness through knowledge.

Hedonists

Individuals or philosophies that prioritize pleasure or happiness as the highest good.

Self-defeating

Refers to actions or policies that undermine their own goals or purposes.

Psychological Egoism

A theory suggesting that all human actions are motivated by self-interest, even in what seem to be acts of altruism.