What are the three criteria that are used to judge a central bank's independence and how does the Fed stack up to each of these criteria?
What will be an ideal response?
The three criteria selected by the author include budgetary independence, irreversible decisions, and long terms for central bankers. The Fed meets each of these criteria. The Fed's income is so large that the vast majority of it is actually returned to the Treasury, so the Fed cannot be held up by Congressional appropriations. The interest rate or monetary policy decisions of the FOMC can only be reversed by the FOMC And finally, the Governors serve fourteen-year terms, the Chairman a four-year term that does not coincide with the U.S. President's term and even the Regional Bank presidents have five-year terms.
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National defense made up the largest portion of federal expenditures in 2009.
Answer the following statement true (T) or false (F)
Standard game theory predicts a solution to the ultimatum game that is rarely observed when people actually play the game
The key reason that behavioral economists believe the predicted and observed outcomes differ is because people account for ________ of the outcome when making decisions. A) loss aversion B) fairness C) efficiency D) utility
Opening trade between two nations would:
a. shift their production possibilities curves outward. b. shift their production possibilities curves inward. c. leave the production possibilities unchanged and increase their consumption possibilities. d. leave the production possibilities unchanged and decreased their consumption possibilities.
A market equilibrium will generate the largest possible surplus when:
A. there are no external benefits and external costs. B. there is perfect competition. C. perfect information is available. D. All of these.