The argument for an independent central bank is based upon the idea that: a. independence from the political cycle allows the bank to focus on long term price stability b. independence and unaccountability allows a central bank to accumulate wealth and power c. independence makes it easier for the bank to coordinate its monetary policy with the government's fiscal policies

The argument for an independent central bank is based upon the idea that: a. independence from the political cycle allows the bank to focus on long term price stability b. independence and unaccountability allows a central bank to accumulate wealth and power c. independence makes it easier for the bank to coordinate its monetary policy with the government's fiscal policies

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter14: Macroeconomic Policy: Tradeoffs, Expectations, Credibility, And Sources Of Business Cycles

Section: Chapter Questions

Problem 6E

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Question

The argument for an independent central bank is based upon the idea that:

a. independence from the political cycle allows the bank to focus on long term price stability

b. independence and unaccountability allows a central bank to accumulate wealth and power

c. independence makes it easier for the bank to coordinate its monetary policy with the government's fiscal policies

Definition Definition Policy implemented by the central bank of a country (such as the Federal Reserve in the United States) to achieve certain macroeconomic objectives. Monetary policy is a supply-side macroeconomic policy that supervises the growth rate and money supply in the economy.

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