If a Central Bank Is Independent

question 281

Multiple Choice

If a central bank is independent,

• A)it has the ability to alter taxes.
• B)it allocates savings to firms.
• C)it restricts trade to increase domestic employment.
• D)it operations are not controlled by the political process.

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Definitions:

Social Facilitation

The tendency for people to perform differently when in the presence of others than when alone, often improving on simple or well-rehearsed tasks.

Groupthink

A psychological phenomenon that occurs within a group of people in which the desire for harmony in decision-making results in an irrational or dysfunctional outcome.

Group Polarization

The tendency of a group to make decisions that are more extreme than the initial inclination of its members.

Risky Shift

A phenomenon in group decision-making processes where groups tend to make riskier decisions compared to individuals.