Critics of Fed Independence Argue

question 3

Multiple Choice

Critics of Fed independence argue

• A) that it is undemocratic to have monetary policy controlled by an elite group responsible to no one.
• B) that an independent Fed conducts monetary policy with a consistent inflationary bias.
• C) that the Fed, since it does not face a binding budget constraint, spends too much of its earnings.
• D) only A and B of the above.

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Definitions:

Downward Communication

A form of organizational communication that flows from higher levels of management to subordinate levels.

Grapevine Communication

Informal information exchange among people in an organization, often involving rumors or unsubstantiated facts.

Downward Communication

Information flow from higher levels of an organization's hierarchy to the lower levels, often involving directives, updates, or feedback.

Interpersonal Level

Pertaining to or involving relationships between individuals.