Which of the Following Statements Concerning an Independent Central Bank

question 73

Multiple Choice

Which of the following statements concerning an independent central bank are true?

• A) Politicians may prefer an independent central bank, as it can be used as a "whipping boy" or "scapegoat" for poor economic performance.
• B) Politicians in a democratic society may be shortsighted because of their desire to win reelection; thus, the political process may generate a political business cycle, in which just before an election expansionary policies are pursued to lower unemployment and interest rates.
• C) Putting the Bank of Canada under control of the government may place too much pressure on the Bank to finance federal budget deficits, thereby imparting an inflationary bias to monetary policy.
• D) All of the above are true statements.

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Definitions:

Broca's Area

A region in the frontal lobe of the dominant hemisphere of the brain with functions linked to speech production.

Cerebral Cortex

The outer layer of neural tissue of the cerebrum of the brain, playing a key role in memory, attention, perception, cognition, awareness, thought, language, and consciousness.

Aphasia

A disorder resulting from damage to portions of the brain responsible for language, leading to difficulties in speaking, understanding, reading, or writing.

Facial Features

Facial features include the distinct parts of a person's face, such as eyes, nose, mouth, which can be key to identifying individuals and expressing emotions.