Which of the Following Statements Is True

question 123

Multiple Choice

Which of the following statements is true?

• A)Central bank independence guarantees that central banks won't make more mistakes than they would if they were not independent.
• B)Central bank independence guarantees that the central bank will always pursue price stability.
• C)Independent central banks do not need to be held accountable for their actions.
• D)Central bank independence can be taken too far.
• E)Central banks should pursue the goal of price stability at all costs.

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Definitions:

Sunk Costs

Costs that have already been incurred and cannot be recovered, and therefore should not influence future business decisions.

Opportunity Costs

The cost of the next best alternative that is foregone when a decision is made.

Unitising Costs

The process of breaking down costs into smaller, individual pieces or units to better analyze and manage them.

Quantitative Information

Data or information that can be measured and expressed numerically, facilitating objective analysis and decision-making.