Question
In: Finance
What factors limit the independence of the Federal Reserve?
What factors limit the independence of the Federal Reserve?
Solutions
Expert Solution
Factors which are limiting the independence of Federal Reserve are as follows-
A. Federal Reserve is always working in synchronisation with the government and Federal government influences its decision-making to large extent.
B. Federal Reserve is also accountable for its decision making to Congress and it needs to report all of its decision to Congress.
C. Federal Reserve is also pressurized by government to always go for quantitative easing because it will help them fetch more votes.
D. Federal Reserve is also holding various private securities in its books of account so it is always working for market interest.
E. Federal Reserve is not able to predict with the changing economic situations in advance and they are losing through wrong policy formations.
F. Federal Reserve is also trying to increase employment in the economy, and for that it needs to always stimulate the economy at the time of crisis.
These will be limiting the overall efficiency and independence of Federal Reserve.
jeff jeffy answered 2 years agoRelated Solutions
The Federal Reserve is supposed to have some degree of independence from the Federal government. What...
What is meant by the "independence" of the Fed? Is the Federal Reserve independent? Explain why...
Which of the following is not a feature of Federal Reserve independence? a. Selection of the...
In what way does the Federal Reserve have a high degree of instrument independence? If it...
In what way does the federal reserve have a high degree of instrument independence? If it...
Explain the pros and cons of the independence of a central bank. Should the Federal Reserve...
Compare the structure and independence of the European System of Central Banks and the Federal Reserve...
What is the federal reserve? What are the functions of the federal reserve? Please discuss in...
Critics of Federal Reserve independence say that the central bank and government must be tightly coordinated in...
Critics of Federal Reserve independence say that the central bank and government must be tightly coordinated in...
- A solution is prepared by dissolving 15 ml of methanol in 150.0 ml water at 25...
- Consider a newlywed who is planning a wedding anniversary gift of a trip to Canada for...
- We are evaluating a project that costs $868,000, has a life of eight years, and has...
- a.) Given sample data: 61.2, 61.9, 62.8, 63.1, 64.0, 64.3, 64.9, 65.5, 66.3 and 67.9, test...
- A research paper describes an experiment in which 74 men were assigned at random to one...
- 1. Which components would a retail organization consider while surveying/assessing the suitability of its products for...
- Design and inplement a synchronous counter that counts.