The Case for Federal Reserve Independence Does Not Include the Idea

question 30

Multiple Choice

The case for Federal Reserve independence does not include the idea that

• A) political pressure would impart an inflationary bias to monetary policy.
• B) a politically insulated Fed would be more concerned with long-run objectives and thus be a defender of a sound dollar and a stable price level.
• C) policy is always performed better by an elite group such as the Fed.
• D) a Federal Reserve under the control of Congress or the president might make the so-called political business cycle more pronounced.

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Definitions:

Beginning Inventory

The value of a company’s inventory at the start of an accounting period, carried over from the end of the previous period.

Periodic Inventory System

An accounting method where inventory and cost of goods sold are determined at the end of a period through a physical count.

FIFO Inventory

A method of inventory valuation where the first items produced or acquired are the first ones sold, FIFO stands for "First In, First Out."

Cost of Goods Sold

The total cost of all raw materials, labor, and overhead expenses incurred to produced goods that were sold during a particular period.