A Potential Problem of a More Politically Controlled Central Bank

question 30

Multiple Choice

A potential problem of a more politically controlled central bank is that

• A)politicians may want to pursue monetary policies that are bad in the short run but good in the long run.
• B)politicians may want to pursue monetary policies that are good in the short run but bad in the long run.
• C)politicians may take too long to decide on the direction of monetary policy.
• D)conducting both monetary policy and fiscal policy as part of the political process may produce inconsistent results.

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Definitions:

Observable Behavior

Behavior that can be seen or measured, often used in psychological studies or workplace assessments to determine how individuals act in certain situations.

Permanent Change

A change that is intended to be lasting and not reversible, affecting an organization or system indefinitely.

Neutral Stimulus

A stimulus that initially produces no specific response other than focusing attention, until it is associated with a certain response through conditioning.

Classical Conditioning

A training method where two signals are consistently associated; the reaction initially triggered by the second signal is ultimately triggered by the first signal alone.