Research Indicates That the More Independent the Central Bank

question 34

Multiple Choice

Research indicates that the more independent the central bank,

• A)the smaller the budget deficit.
• B)the higher the nominal interest rate.
• C)the lower the rate of inflation.
• D)the larger the time inconsistency problem in making policy.
• E) the greater the likelihood of a "war of attrition" over policy.

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Definitions:

Racial Disparities

Unequal outcomes and experiences among racial groups, often in health, education, and employment.

Mortality

The state of being subject to death; often used in statistics to refer to the rate of death in a population.

Severity

The extent of harm or damage that can be caused by an event or condition, often used in the context of diseases or natural disasters.

Per Person Expenditures

The average amount of money spent by or on behalf of an individual, often used in contexts such as healthcare, education, and public services.