A Central Bank That Is Independent of the Administration Is

question 8

Multiple Choice

A central bank that is independent of the administration is desirable since

• A)independence decreases the likelihood of political cycles
• B)countries with independent central banks tend to have lower inflation rates
• C)independence mitigates the problem of dynamic inconsistency
• D)independence lends more credibility to monetary policy
• E)all of the above

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Definitions:

Raw Material

The basic material from which products are made, not yet subjected to any processing or manufacturing.

Material R

A specified type of raw material used in the production of goods, referred to as "Material R" for distinction purposes.

Fixed Expenses

Costs that do not change with the level of output or sales and remain constant over a period, such as rent or salaries.

Discontinuing Product

The process of ceasing the manufacture, sale, and support of a product line or brand.