Asked by Great Amazing on May 28, 2024
Verified
Which statement is the most accurate?
A) The Bank of England and La Banca d'Italia are quite independent from political control.
B) Central banks with relatively little independence from political control are often under pressure to increase the money supply,which could easily lead to high inflation rates.
C) The European central bank has consistently followed policies that have led to unacceptably high rates of inflation.
D) The Bank of Canada,the Bank of Japan,and the Federal Reserve all have very little independence from political control.
Central Banks
Institutions that manage the currency, money supply, and interest rates of a state or country.
Political Control
The influence or authority exerted by a government or political group over its citizens, economic system, or societal structures.
Inflation Rates
The percentage increase in the price level of goods and services over a period, reducing purchasing power.
- Recognize the roles and objectives of the Federal Reserve system.
Verified Answer
SM
Sojan ManuelMay 29, 2024
Final Answer :
B
Explanation :
This statement accurately reflects the relationship between central banks and political control. Central banks that have little independence are often pressured to increase the money supply, which can lead to high inflation rates. The other statements are not accurate - the Bank of England and La Banca d'Italia have some independence, the European Central Bank has not consistently led to high inflation rates, and the Bank of Canada, Bank of Japan, and Federal Reserve all have varying degrees of independence.
Learning Objectives
- Recognize the roles and objectives of the Federal Reserve system.