The Federal Reserve is designed to be an independent entity to avoid political pressure from other branches of government. While it works closely with the Treasury department, its decision-making process should not be easily swayed by political pressure. The effectiveness of the Federal Reserve is a matter of debate and varies depending on one's perspective.

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The Federal Reserve

Question 89

Multiple Choice

The Federal Reserve:

A) is fairly independent of the rest of government.
B) works closely with the Treasury department.
C) is easily swayed by political pressure.
D) has become an ineffective policy-making body in the last decade.

Correct Answer: