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:

Cerebral Cortex

The cerebral cortex is the outer layer of neural tissue of the cerebrum of the brain, playing a key role in memory, attention, perception, awareness, thought, language, and consciousness.

Corpus Callosum

A wide strip of nerve tissue connecting the brain's two halves, enabling them to communicate with each other.

Hippocampus

A part of the brain's limbic system, crucial for memory formation and spatial navigation.

Cerebral Hemispheres

The two halves of the brain, the left and right hemispheres, each responsible for different functions and controlling opposite sides of the body.