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There are 7 members of the Federal Reserve Board of Governors. Which of the following contributes to making the Federal Reserve an independent policymaking body?

(A) Members of the Board of Governors are appointed for 14-year terms.
(B) Its role is written into the U.S. Constitution.
(C) There are 12 Federal Reserve banks.
(D) The Federal Reserve's primary tool for changing the money supply is.
(E) In order to increase the number of dollars in the U.S. economy (the money supply), the Federal Reserve will government bonds.

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Answer:

(A) Members of the Board of governors are appointed for 14- yeas terms.

Explanation:

The primary justification for an independent Federal Reserve is the need to insulate it from short-term political pressures. Without a degree of autonomy, the Fed could be influenced by election-focused politicians into enacting an excessively expansionary monetary policy to lower unemployment in the short-term.

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