The Case for Federal Reserve Independence Includes the Idea That

question 31

Multiple Choice

The case for Federal Reserve independence includes the idea that

• A) 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.
• B) a Federal Reserve under the control of Congress or the president might make the so-called political business cycle more pronounced.
• C) the principal-agent problem is perhaps worse for the Fed than for congressmen since the former does not answer to the voters on election day.
• D) only A and B of the above.

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Definitions:

Uncontrollably Intrude

To enter or encroach upon a situation or space without invitation or ability to control the action.

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The process by which children come to understand and communicate language during early childhood.

Theories Criticisms

The process of analyzing, evaluating, and questioning existing theories to highlight their limitations, inconsistencies, or shortcomings in explaining phenomena.

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A cognitive process characterized by the ability to think logically, abstractly, and with complexity, typically developed in adulthood.