Research for a number of OECD countries suggest that inflation will be lower:
A) where the terms of the heads of central banks coincide with the terms of elected officials.
B) if the heads of central banks are chosen by election.
C) the more independent the central bank.
D) when there are close ties between the central bank and the government.
E) the less independent the central bank.

Question

Quizplus · Accepted Answer

The more independent the central bank, the lower the inflation rate tends to be, according to research for a number of OECD countries. This is because an independent central bank is better able to pursue its mandated objective of maintaining price stability without political interference or pressure to pursue short-term economic goals.

Research for a Number of OECD Countries Suggest That Inflation