Economists Consider Central Bank Independence to Be a Key Factor

question 2

Multiple Choice

Economists consider central bank independence to be a key factor in keeping inflation under control. Why?

• A) Elected officials (legislators and the executive branch) tend to pursue policies popular with the public that may increase inflationary tendencies, whereas the Central Bank does not have such pressure.
• B) The central bank should be able to use stimulative monetary policy whenever it chooses without worrying about inflationary tendencies.
• C) Inflation is generated by legislative deficit spending-the central bank can offset that spending and the inflation it causes.
• D) The central bank's directors and executives are always political appointees, and it is clear that low inflation is popular with the public.

---

Definitions:

Retailer's Store

A business establishment that sells goods directly to the public, typically from a physical location.

Customers

Individuals or organizations that purchase goods or services from a business, determining its success through their satisfaction and loyalty.

Technology

The application of scientific knowledge for practical purposes, particularly in industry and everyday life.

Account Control

The process of managing and overseeing a customer account to ensure satisfaction, retention, and profitability.