Monetary policymakers are allowed

Question

Quizplus · Accepted Answer

Monetary policy involves using interest rates and other tools to regulate the supply and demand for money in the economy. This gives policymakers a significant amount of discretion in setting policy, which can lead to the potential for political influence on the economy. As a result, there is a possibility for a political business cycle to occur, where policymakers adjust monetary policy in an attempt to influence the economy and benefit their political standing. Therefore, Option D is the best answer.

Monetary Policymakers Are Allowed