the main reason to keep the fed indepedent of the rest of the government is to avoid?

Question

a. inflation
b. unemployment`
c. high interest rates
d. none of the above

Answer 1

D. none of the above. It is to keep the economy from being manipulated for political gain. In other words to keep it free of politics.

Answer 2

a. inflation --- If you let politicians control the money supply, they'll have an incentive to always increase the money supply and cut interest rates in order to stimulate the economy (and hence make themselves popular), they'll inevitably go too far and ignite high inflation. Then they won't have the courage to raise interest rates and choke off the money supply, so you'll soon have hyperinflation.

Going back to the Kings of old, rulers have always had a tendency to debase the currency when they could.

Answer 3

d. since the only reason is for them to have self interest on economic welfare for the country, not on political gains.

Answer 4

d