The case for Bank of Canada independence does not include the idea that ________.
A) political pressure would impart an inflationary bias to monetary policy
B) a politically insulated Bank would be more concerned with long-run objectives and thus be a defender of a sound dollar and a stable price level
C) a Bank of Canada under the control of the government might make the so-called political business cycle more pronounced
D) the principal-agent problem is perhaps worse for the Bank of Canada than for politicians since the former does not answer to the voters on election day
Correct Answer:
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