The most important feature of a central bank is
A)the size of the money supply it controls.
B)its ability to set fiscal policy.
C)its operating budget.
D)its independence from government.
E)its net worth.

Question

Quizplus · Accepted Answer

The independence of a central bank from government is crucial in ensuring the credibility of its monetary policy decisions. If a central bank is subject to political influence or pressure, it may make decisions that prioritize short-term political goals over long-term economic stability. Therefore, the ability of a central bank to operate independently and make decisions based on economic considerations is essential for effectively carrying out its functions.

The Most Important Feature of a Central Bank Is