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The Case for Federal Reserve Independence Includes the Idea That

Question 57

Multiple Choice
The case for Federal Reserve independence includes the idea that

The case for Federal Reserve independence includes the idea that


A) a politically insulated Fed would be more concerned with long-run objectives and thus be a defender of a sound dollar and a stable price level.
B) a Federal Reserve under the control of Congress or the president might make the so-called political business cycle more pronounced.
C) the principal-agent problem is perhaps worse for the Fed than for congressmen since the former does not answer to the voters on election day.
D) only A and B of the above.

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