The operational components required for truly independent central banks include:

Question

Quizplus · Accepted Answer

Truly independent central banks require monetary policies that cannot be reversed by anyone outside of the central bank. This allows the central bank to operate free from political interference and focus on its primary objective of promoting price stability and economic growth.

Answer: B 
 The ability to have policies reversed is also important for central banks to maintain independence. This ensures that political pressure cannot be applied to the central bank to change its policies or decisions.

Answer: A and D are both incorrect. A budget controlled by Congress would not be desirable for an independent central bank, as it would limit its ability to make decisions based on its own analysis and expertise. Additionally, the chairperson of the bank should not be answerable only to the President, as this could potentially allow for political interference in the central bank's decision-making processes.

The Operational Components Required for Truly Independent Central Banks Include