Economists Consider Central Bank Independence to Be a Key Factor

Multiple Choice

Economists consider central bank independence to be a key factor in keeping inflation under control. Why?

A) Elected officials (legislators and the executive branch) tend to pursue policies popular with the public that may increase inflationary tendencies, whereas the Central Bank does not have such pressure.
B) The central bank should be able to use stimulative monetary policy whenever it chooses without worrying about inflationary tendencies.
C) Inflation is generated by legislative deficit spending-the central bank can offset that spending and the inflation it causes.
D) The central bank's directors and executives are always political appointees, and it is clear that low inflation is popular with the public.