The Ability of a Central Bank to Set Monetary Policy

question 64

Multiple Choice

The ability of a central bank to set monetary policy instruments is

• A)political independence.
• B)goal independence.
• C)policy independence.
• D)instrument independence.

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Definitions:

Depth Perception

The ability to perceive the world in three dimensions and to judge the distance of objects.

Emotional Reactions

Immediate responses to stimuli or situations that involve feelings, ranging from happiness and love to anger and fear.

Internal Locus

A psychological term referring to individuals who believe they have control over their own life events and outcomes, as opposed to external forces.

External Locus

A belief that one's life events are largely controlled by external forces or factors beyond one's personal control.