Advanced Placement (AP)

Brenden Barnes

1 January, 14:31

Which statement best describes the relationship between central bank

Independence and price stability?

A. A government with a high degree of control over its central bank is better able to

promote price stability because it can directly control the growth rate of the mone

supply

B. When the central bank of a country is too closely aligned to the political process,

O temptation to abuse its authority to print money can become too great, which can

result in high rates of inflation