Why Is Accountability for Monetary Policy Choices (As Opposed to Giving

question 71

Multiple Choice

Why is accountability for monetary policy choices (as opposed to giving policymakers undisciplined discretion) important?

• A) Monetary policy has a large and lasting influence on aggregate demand and therefore on employment and income.
• B) Elected policymakers can benefit from manipulating monetary policy.
• C) Monetary policy announcements will be more credible.
• D) Countries with the most independent central banks tend to have the highest rates of inflation.

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Definitions:

Net Float

The difference between checks written against a checking account and those that have been cleared by the bank.

Net Collection Float

The net collection float is the time difference between when a check is deposited into a bank account and when the funds become available for use, essentially measuring the delay in bank processing.

BAT Model

Behavioral Adjustment Training Model, a framework used to manage or change certain behaviors, not a term typically associated with standard economics or finance.

Securities Trading Costs

Expenses associated with the buying and selling of securities, including brokerage fees, commissions, and taxes.