Question

The purpose of having the members of the Board of Governors of the Federal Reserve serve fourteen-year terms is to:

A. ensure that the governors become well-experienced at policymaking

B. Establish long-standing ties with high-level officials of other nations' central banks

C. Promote unity of opinion from shared time together

D. Insulate the governors' policy decisions from the influence of presidential elections and policies.

Answer 1

Answer:-

The purpose of having governors of the Federal Reserve serve fourteen-year terms is to:

Options A and B are correct since Governors need to have long-standing ties with other nations to understand the operations of other countries and make policy wise decisions accordingly. Without experience, they will not be appointed as Governors but in order to understand the effectiveness of monetary and fiscal policy, in the long run, they need to introduce the policy and study the effects of the same. Hence the long term id required.