What are the primary arguments for and against the independence of the Fed?
What will be an ideal response?
The main argument for the Fed's independence is that monetary policy is too important and technical to be determined by politicians. Complete control of the Fed by elected officials increases the likelihood of political business cycle fluctuations in the money supply. Those who oppose the independence of the Fed claim that in a democracy, elected officials should make public policy. critics of Fed independence argue that placing the central bank under the control of elected officials could confer benefits by coordinating and integrating monetary policy with government taxing and spending policies.
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Referring to Figure 19.2, the effect of an increase in Japanese interest rates is represented by a movement from point
A) d to c. B) b to a. C) c to d. D) d to a.
The purpose of antitrust legislation is
A) to reduce unemployment. B) to reduce the power of monopoly. C) to increase the power of monopoly. D) to maximize employment for a given price level.