Explaining Central Bank Behavior
1) The theory of bureaucratic behavior suggests that the objective of a bureaucracy is to maximize
A) the public"s welfare.
B) profits.
C) its own welfare.
D) conflict with the executive and legislative branches of government.
2) The theory of bureaucratic behavior when applied to the Fed helps to explain why the Fed
A) is supportive of congressional attempts to limit the central bank"s autonomy.
B) is so secretive about the conduct of future monetary policy.
C) sought less control over banks in the 1980s.
D) is willing to take on powerful groups that may threaten its autonomy.
3) Compared to the Federal Reserve, the European Central Bank is less transparent because
A) the European Central Bank doesn"t publicly release its inflation rate target for the European Monetary Union while the Federal Reserve publicly releases its inflation rate target for the United States.
B) the Federal Reserve holds a press conference after a policy meeting while the European Central Bank makes no public statement after its policy meetings.
C) the Federal Reserve publicly releases the minutes 3 weeks after the meetings while theEuropean Central bank waits 20Â years to publicly release its minutes.
D) the European Central Bank does not publicly release its economic forecasts while the Federal Reserve immediately releases its economic forecasts to the public.