A central bank should remain vague about the relative importance it places on its various objectives. That way, it has the freedom to choose which objective to follow at any point in time.” Assess this statement in light of what you know about good central bank design.
Answer to relevant QuestionsProvide arguments for why you think the financial crisis of 2007-2009 did or did not compromise the independence of the Federal Reserve. The Maastricht Treaty, which established the European Central Bank, states that the governments of the countries in the European Monetary Union must not seek to influence the members of the central bank’s decision-making ...To what extent has the Federal Reserve “monetized” government debt? Plot since 1970 the change from a year ago (measured in billions of dollars) in gross federal debt (FRED code: FYGFD) and the change from a year ago ...Currently, all the national central banks in the Euro system are involved with the day-to-day implementation of monetary policy. What do you think the advantage would be of centralizing the conduct of these day-to-day ...Do you think the current procedures for appointing members to the Board of Governors are consistent with the principles of good central bank design? Explain your answer.
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