The Main Argument Against Fed Independence Is That

question 54

Multiple Choice

The main argument against Fed independence is that

• A)in a democracy elected officials should make public policy.
• B)monetary and fiscal policy would be easier to coordinate if the Fed were not independent.
• C)the Fed has proven irresponsible on many occasions.
• D)congressional control was tried during the 1960s and it worked well.

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Definitions:

Cost of Money

Refers to the interest rate or the opportunity cost of borrowing or using money.

Car Dealer

A business that sells new or used cars at the retail level, typically based on a dealership contract with an automaker or sales subsidiary.

Lease

A contractual agreement where one party, the lessor, grants the other party, the lessee, the right to use an asset for a specified period in exchange for payment.

Discount Rate

A rate used to determine the present value of future cash flows; in monetary policy, it refers to the interest rate charged to commercial banks for loans from a central bank.