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A Potential Problem of a More Politically Controlled Central Bank

Question 16

Multiple Choice

A potential problem of a more politically controlled central bank is that


A) politicians may want to pursue monetary policies that are bad in the short run but good in the long run.
B) politicians may want to pursue monetary policies that are good in the short run but bad in the long run.
C) politicians may take too long to decide on the direction of monetary policy.
D) conducting both monetary policy and fiscal policy as part of the political process may produce inconsistent results.

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