**Core Concept**
Korsakoff's Psychosis is a neurological disorder characterized by anterograde amnesia (inability to form new memories), retrograde amnesia (loss of memories formed before the onset of the disease), and confabulation (spontaneous fabrication of memories). It is primarily caused by thiamine deficiency, often resulting from chronic alcohol abuse.

**Why the Correct Answer is Right**
In Korsakoff's Psychosis, patients exhibit severe memory impairments due to the degeneration of the hippocampus and other areas of the temporal lobe. This degeneration disrupts the normal functioning of the cholinergic system, which is crucial for memory formation. The lack of thiamine, a cofactor for several key enzymes, including transketolase, exacerbates the damage to the hippocampus and surrounding areas.

**Why Each Wrong Option is Incorrect**
**Option A:** This option is incorrect because Korsakoff's Psychosis is indeed characterized by memory impairments, which include anterograde and retrograde amnesia.
**Option B:** This option is incorrect because confabulation, the spontaneous fabrication of memories, is a hallmark feature of Korsakoff's Psychosis.
**Option C:** This option is incorrect because Wernicke's Encephalopathy, a related condition, can present with similar symptoms, including confusion, ataxia, and ophthalmoplegia.

**Clinical Pearl / High-Yield Fact**
Korsakoff's Psychosis is often seen as a complication of Wernicke's Encephalopathy, and early diagnosis and treatment with thiamine can help prevent its development.

**Correct Answer:** A. Normal EEG