Supporters of the Fed's independence maintain that monetary policy tends to become too ______ if left to policy makers with short-run horizons, thus intensifying ______.

Question

Quizplus · Accepted Answer

Supporters of the Fed's independence argue that without it, monetary policy might become too expansionary as policymakers focus on short-term gains, which can lead to higher inflation.

Supporters of the Fed's Independence Maintain That Monetary Policy Tends