The strongest argument for an independent Bank of Canada rests on the view that subjecting the Bank to more political pressures would impart ________.

Question

Quizplus · Accepted Answer

Subjecting the Bank of Canada to political pressures could lead to an inflationary bias in monetary policy. This is because politicians who are responsible to the public and have to face elections may be more inclined to pursue short-term goals, such as boosting employment or economic growth, at the expense of longer-term objectives, such as price stability. An independent central bank, on the other hand, can focus on achieving its mandate of maintaining low and stable inflation, free from political interference.

The Strongest Argument for an Independent Bank of Canada Rests