Advocates of Fed Independence Fear That Subjecting the Fed to Direct

question 85

Multiple Choice

Advocates of Fed independence fear that subjecting the Fed to direct presidential or congressional control would

• A) impart an inflationary bias to monetary policy.
• B) force monetary authorities to sacrifice the long-run objective of price stability.
• C) make the so-called political business cycle less pronounced.
• D) do all of the above.
• E) do only A and B of the above.

---

Definitions:

Employment Levels

The number or percentage of people within a population who are currently employed, indicating the health of an economy.

International Gold Standard

A monetary system in which the standard economic unit of account is based on a fixed quantity of gold, allowing for stable exchange rates among countries.

Gold Flow

The movement of gold between countries, often used as a form of international payment or to stabilize currencies under the gold standard.

Price and Incomes

Policies or measures aimed at controlling the growth of prices and incomes to curb inflation without affecting employment.