Which of the Following Statements About Central Bank Structure and Independence

question 7

Multiple Choice

Which of the following statements about central bank structure and independence are true?

• A) In recent years, with the exception of the Bank of England and the Bank of Japan, most countries have reduced the independence of their central banks, subjecting them to greater democratic control.
• B) Before the Bank of England was granted greater independence, the Federal Reserve was the most independent of the world's central banks.
• C) Both theory and experience suggest that more independent central banks produce better monetary policy.
• D) While the European Central Bank is independent, it is not as independent as the Federal Reserve.

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Definitions:

Responsibility

A duty or task that an individual or entity is supposed to perform or bear.

Incentive

An external motivator that influences the behavior and decisions of individuals or organizations.

Entrepreneurs

Individuals who initiate, manage, and assume the risks of starting and running a new business venture.

Create Wealth

This refers to the process of generating value through the production of goods, services, or other means that increases the economic resources or wealth of an individual, community, or country.