The Case for Federal Reserve Independence Does NOT Include the Idea

question 17

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.

---

Definitions:

No Further Deposits

A situation or condition where no additional deposits or contributions are allowed.

Future Value

The value of an asset or cash at a specified date in the future that is equivalent in value to a specified sum today, considering interest or capital gains.

Purchasing Power

The amount of goods or services that one unit of money can buy, reflecting the economic value of currency.

Interest Rate

The fee that a borrower must pay to a lender for borrowing assets, typically represented as a percentage of the principal amount.