Question

In: Economics

Which of the following is not a feature of Federal Reserve independence? a. Selection of the...

Which of the following is not a feature of Federal Reserve independence?

a. Selection of the final goals of monetary policy

b. 14-year terms of Board members

c. Outside congressional appropriations process

d. Exempt from General Accountability Office (GAO) audit of monetary policy

Solutions

Expert Solution

Exempt from General Accountability Office Audit.

( Federal system is granted independence so that it can pursue statutory goals effectively with out interference from the Government.

* Federal Reserve formulates and implements monetary policy to promote maximum employment ,stable price and moderate long term interest rates..

*Fed's governors have staggered and lengthy nonrenewable 14-year tenure.

* Fed's budget is not subjected to Congressional appropriations.

* Fed is self-funded.

> However, Fed isn't exempt from General Account Office audit of monetary policy. Infact, fed is extensively auditored in order to ensure its accountability.)

Rahul Sunny answered 2 years ago
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