The Case for Bank of Canada Independence Does Not Include

question 72

Multiple Choice

The case for Bank of Canada independence does not include the idea that ________.

• A) political pressure would impart an inflationary bias to monetary policy
• B) a politically insulated Bank would be more concerned with long-run objectives and thus be a defender of a sound dollar and a stable price level
• C) a Bank of Canada under the control of the government might make the so-called political business cycle more pronounced
• D) the principal-agent problem is perhaps worse for the Bank of Canada than for politicians since the former does not answer to the voters on election day

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Definitions:

Yardsticks

Measures or standards used for comparison.

Preventive Actions

Measures taken to detect and eliminate potential causes of non-conformities or other undesirable situations before they occur.

Corrective Actions

Corrective actions refer to steps taken to identify, eliminate, and prevent the recurrence of undesirable behaviors or conditions in an organization or process.

Necessary

Essential or needed to achieve a specific outcome or fulfill a particular need.