When the Federal Reserve Sells Securities on the Open Market

question 60

Multiple Choice

When the Federal Reserve sells securities on the open market it drives bond prices ____ and drives interest rates ___.

• A)up;up
• B)down;down
• C)up;down
• D)down;up

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Definitions:

Altruistic Behavior

Selfless actions performed for the benefit of others, without expectation of personal gain.

Self-Interest

The concern for one's own advantage and well-being, with behavior guided primarily by personal benefits.

Psychological Egoist

A theory or belief that posits individuals are inherently driven by self-interest, and all actions, even those appearing altruistic, are ultimately motivated by personal gain.

Motivated

Having a strong willingness or drive to do something.