Which of the following statements about central bank structure and independence are true?
A) In recent years, with the exception of the Bank of England and the Bank of Japan, most countries have reduced the independence of their central banks, subjecting them to greater democratic control.
B) Before the Bank of England was granted greater independence, the Federal Reserve was the most independent of the worlds central banks.
C) Both theory and experience suggest that more independent central banks produce better monetary policy.
D) While the European Central Bank is independent, it is not as independent as the Federal Reserve.
Answer: C) Both theory and experience suggest that more independent central banks produce better monetary policy.
You might also like to view...
When the demand for products competing with imports falls, demand for the specific factors used in their production falls and:
a. the relative prices (earnings) of these specific factors will fall disproportionally. b. the relative prices (earnings) of these specific factors will rise disproportionally. c. the relative prices (earnings) of these specific factors will fall by the same rate as for all resources. d. the employment of these specific factors will rise disproportionally.
If the general level of prices is higher than business decision makers anticipated when they entered into long-term contracts for raw materials and other resources, which of the following is most likely to occur?
a. a recession b. output less than the economy's long-run potential c. a sharp reduction in imports d. an unemployment rate that is less than the economy's natural rate of unemployment