An Independent Central Bank Is an Advantage for Monetary Policy

question 47

Multiple Choice

An independent central bank is an advantage for monetary policy because

• A) central banks can employ the most able staff if they have the independence to pay high salaries.
• B) central banks have direct and frequent contact with commercial banks.
• C) central banks do not have the same incentive as politicians to break their promises to keep inflation down.
• D) central banks have greater expertise in monetary policy than government finance departments.

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