The Case for Federal Reserve Independence Does Not Include the Idea

question 91

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) 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.
• C) 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.
• 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:

Soft Palate

The muscular posterior portion of the palate, separating the mouth from the nasopharynx during swallowing.

Dentition

The arrangement or condition of the teeth within the mouth, including their number, type, and structure.

Molars

Large, flat teeth located at the back of the mouth, used for grinding and chewing food.

Cats

Domesticated felines known for their agility, curiosity, and independence, widely kept as pets or for controlling pests.