Which of the Following Statements About Central Bank Structure and Independence

question 62

Multiple Choice

Which of the following statements about central bank structure and independence is 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:

Decision-making Biases

Systematic errors in thinking that affect the decisions and judgments that people make.

Persuasive Argument Theory

A theory suggesting that the process of persuasion involves the presentation of arguments, which leads to attitude change when the arguments are received and accepted by an individual.

Actor-observer Difference

A cognitive bias where people tend to attribute their own actions to external situations while attributing others' actions to their personalities or dispositions.

Bias

A tendency to lean in a certain direction, often unfairly, in thought or decision, usually leading to a prejudiced outcome.