Which Characteristic of the Fed Was NOT Designed to Help

question 74

Multiple Choice

Which characteristic of the Fed was NOT designed to help maintain the Fed's independence?

• A) The Fed's actions are not subject to executive branch control. If the Fed chooses a course counter to what the president might wish, the president has no means to prevent it.
• B) Fed Board members are elected but confirmed by the president and the Senate. Board members do not have to worry about pleasing an electorate once elected and confirmed.
• C) Instead of going through the congressional appropriation process, the Fed's budget comes from its earnings on its open market operations.
• D) Board members serve 14-year terms and cannot be reappointed. The board members do not have an incentive to please Congress and the president in hopes of being reappointed.

---

Definitions:

Joint Goal

An objective or target shared by two or more parties who are working together to achieve it.

Poison Pills

A strategic approach adopted by corporations to fend off hostile takeover attempts by rendering themselves less appealing to the interested buyer.

Strategic Fits

The degree to which the strategies and operations of two or more businesses or units complement and reinforce each other.

Acquisitions

The process of obtaining control of another company by purchasing or exchanging shares.