54 676
Assignments Done
98,2%
Successfully Done
In November 2017
Your physics homework can be a real challenge, and the due date can be really close — feel free to use our assistance and get the desired result.
Be sure that math assignments completed by our experts will be error-free and done according to your instructions specified in the submitted order form.
Our experts will gladly share their knowledge and help you with programming homework. Keep up with the world’s newest programming trends.

Answer on Macroeconomics Question for suja

Question #12459
why is central bank independence important? state your own veiws
Expert's answer
Central bank independence is the absence of daily and direct control over the current
goals and actions of the central bank from the government. The independence of the bank from the government can be achieved by the government's deprivation of the right to dismiss directors of the central bank, or try to force their policies. Central bank independence is welcomed by those who believe that a stable money is a boon
for the economy. The stability of the money supply can sometimes be in conflict with the objectives
of the government, especially when it seeks to increase employment in the
country or to protect a variety of vested interests. There is a belief that government succumbs to the temptation of ill-considered
policies leading to inflation as a result of attempts to increase employment or
inability to resist certain groups, who lobby government spending and tax cuts
too easy.
Thus, being under the direct control of politicians the central bank is forced to conduct monetary policy leading to inflation, and unable to carry out a sufficiently tight monetary policy, preventing inflation.
It is assumed that an independent central bank is better at maintaining monetary
stability for two reasons. First, its obligation to help preserve monetary stability can be fixed by law, and
secondly, price stability is beneficial to banks, as many bank assets are
denominated in money terms. In the long term, central banks, of course, can not be completely independent from
political power, since the banking system is part of the country's political
structure. If the central bank independence is fixed by law, the law can be changed: even in
cases where the independence is guaranteed by the constitution, the constitution
may also be amended.

Need a fast expert's response?

Submit order

and get a quick answer at the best price

for any assignment or question with DETAILED EXPLANATIONS!

Comments

No comments. Be first!

Leave a comment

Ask Your question