Monetary policy is:
A)controlled by the president,who appoints the members of the Board of Governors.
B)controlled by the president,who appoints the members of the Open Market Committee.
C)insulated from politics since the term of only two members of the Board of Governors expires during the tenure of any modern president of the U.S.
D)insulated from politics because the Federal Reserve Board is the bankers' bank.
E)controlled by the department of finance of the United States.

Question

Quizplus · Accepted Answer

Monetary policy is conducted by the Federal Reserve, an independent agency whose Board of Governors is appointed by the president, with Senate confirmation. However, the terms of only two of the seven governors expire during the tenure of any one president, providing insulation from immediate political pressures. The Open Market Committee, which sets monetary policy, includes those governors plus five of the 12 Federal Reserve Bank presidents, who are appointed by their respective regional banks' boards of directors, not by the president. Therefore, choice C is the best answer as it accurately states that monetary policy is insulated from politics.

Monetary Policy Is