Final answer:
The chair of the Federal Reserve is appointed by the President and confirmed by the US Senate. This process, designed to maintain the Fed's semi-decentralized and politically independent status, provides for appointment terms of 14 years for governors, with appointments staggered every two years. The correct option is B.
Step-by-step explanation:
Appointment of the Federal Reserve Chair
The position of the chair of the Federal Reserve is not decided by an election but is filled through a specific appointment process. The correct answer to how the chair is appointed is that the chair of the Fed is appointed by the President of the United States and is then confirmed by the US Senate. This process ensures that the appointment is subject to a system of checks and balances, requiring approval from both the executive and legislative branches of the government.
The Fed's structure is designed to be semi-decentralized and operates under a dual mandate to ensure both stable prices and maximum sustainable employment. The Board of Governors, including the chair, serves terms that are staggered to maintain continuity of policy and independence from immediate political pressures. It is significant to mention that once appointed, the Fed Chair has a substantial influence notwithstanding having only one vote on the Board of Governors, controls the agenda, and acts as the public voice of the Federal Reserve.
Historically, notable chairs of the Federal Reserve have included Alan Greenspan, Ben Bernanke, and currently, Jerome Powell. These individuals have been influential in guiding economic policy during their tenures. Members of the Board of Governors, including the chair, are appointed for 14-year terms, and it is arranged that one governor's term expires every two years to provide for a staggered arrangement that reduces politicization of the board's decisions.