assignment5c[1] - Answers to questions Week 5 17.3 Is the...

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Answers to questions – Week 5 17.3 - Is the Federal Reserve more accountable to the legislative branch of government or to the executive branch? The Federal Reserve is more accountable to the legislative branch. This is because Congress created the Federal Reserve in 1913 and they have the “authority to alter the working mandate at any time. Additionally according to U.S. Code Title 12, Chapter 3, subchapter II part 247, the Board of Governors shall make an annual report to the Speaker of the House which is then printed for Congress. However, it is not subject to control by either the legislative or executive branches of government due to its independence. The Governors are appointed by the President for 14 year terms that are staggered by 2 years which prevents the executive branch from too much control. 17.4 - On what grounds is the semi-independent status of the Federal Reserve justified by those who defend it? On what grounds is that status attacked by those who oppose it? The grounds for independence it to keep the winds of political changes from controlling monetary policy. Politicians may attempt to go the easier rate of lowering interest rates which may be good for the short-run.
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This note was uploaded on 09/07/2011 for the course ECON ECO 201 taught by Professor Unknown during the Spring '09 term at New York Institute of Technology-Westbury.

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assignment5c[1] - Answers to questions Week 5 17.3 Is the...

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