Which of the Following Best Explains Why Independent Central Banks

question 147

Multiple Choice

Which of the following best explains why independent central banks need to be held accountable?

• A)Central banks are used to serving politicians.
• B)They would not otherwise be able to pursue the goal of price stability.
• C)Central bank independence can be taken too far.
• D)Central banks are prone to causing political business cycles.
• E)Central banks do not understand political issues.

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Definitions:

Disinhibition

The reduction of inhibition leading to an increase in spontaneous behavior, often resulting from reduced social or psychological restraint.

Aggressive Behavior

Behavior aimed at causing harm or pain to another being, motivated by hostility, anger, or a desire to dominate.

Inhibition

Refers to the psychological process through which certain behaviors or responses are suppressed.

Respondent Behavior

A behavioral process (also known as the conditioned response) that occurs in reaction to a specific stimulus without conscious intention.