When the Fed Sells Foreign Assets and Buy Domestic Assets

question 42

Multiple Choice

When the Fed sells foreign assets and buy domestic assets at the same time,

• 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.

---

Definitions:

Hormones

Chemical messengers produced by glands in the body that regulate the activity of cells or organs.

Metabolism

The chemical processes that occur within a living organism in order to maintain life, involving the breakdown of substances to generate energy and the synthesis of substances needed by cells.

Unprocessed Foods

Foods that are consumed in their natural state, without undergoing any chemical processing or modification.

AMA Code

A set of ethical guidelines and standards for practicing medicine developed by the American Medical Association.