Supporters of the current system of Bank of Canada independence believe that a less autonomous Bank would ________.

Question

Quizplus · Accepted Answer

Supporters of Bank of Canada independence argue that if the Bank were to become less autonomous, it would become more susceptible to political pressure and may prioritize short-term policy goals rather than the long-term stability of the economy. This could lead to overly expansionary monetary policies and the creation of a political business cycle where monetary policy is manipulated to influence elections. Therefore, both options A and C are possible outcomes of a less autonomous Bank of Canada.

Supporters of the Current System of Bank of Canada Independence