The Influence of Central Banks
Completion requirements
Central banks are typically government-managed or sponsored and play a significant role in some countries' banking systems. The Federal Reserve Bank in the United States sets things such as interest rates, which influence borrowing costs. Read this section and complete the exercises at the end.
Critical Thinking Questions
- Why do presidents typically reappoint Chairs of the Federal Reserve Board even when they were originally appointed by a president of a different political party?
- In what ways might monetary policy be superior to fiscal policy? In what ways might it be inferior?