the economics of money, banking, and financial markets

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15.4 How Independent is the Bank of Canada?

1. 
   

   Instrument independence is the ability of ____ to set monetary policy ____.
   A) the central bank; goals
   B) Parliament; goals
   C) Parliament; instruments
   D) the central bank; instruments
   Answer: D
   Diff: 1 Type: MC Page Ref: 358
   Skill: Recall
   Objective List: 15.2 Identify the Bank of Canada's functions and degree of independence and
   specify the arguments for and against an independent central bank

   
   


2. 
   

   Economist Stanley Fisher defined two types of independence of central banks: ____ and
   ____ independence.
   A) instrument; goal
   B) policy; goal
   C) instrument; political
   D) parliamentary; decision
   Answer: A
   Diff: 1 Type: MC Page Ref: 358
   Skill: Recall
   Objective List: 15.2 Identify the Bank of Canada's functions and degree of independence and
   specify the arguments for and against an independent central bank

   
   


3. 
   

   The ability of a central bank to set monetary policy instruments is ____.
   A) political independence
   B) goal independence
   C) policy independence
   D) instrument independence
   Answer: D
   Diff: 1 Type: MC Page Ref: 358
   Skill: Recall
   Objective List: 15.2 Identify the Bank of Canada's functions and degree of independence and
   specify the arguments for and against an independent central bank

   
   


4. 
   

   Goal independence is the ability of ____ to set monetary policy ____.
   A) the central bank; goals
   B) Congress; goals
   C) Congress; instruments
   D) the central bank; instruments
   Answer: A
   Diff: 1 Type: MC Page Ref: 358
   Skill: Recall
   Objective List: 15.2 Identify the Bank of Canada's functions and degree of independence and
   specify the arguments for and against an independent central bank