Question

E Federal Reserve is independent of the other branches of government. How does this independence help it when it must make difficult decisions, like whether to raise the interest rates?

Answer 1

Answered below

Step-by-step explanation:

The Federal Reserve is made up of twelve regional Federal Reserve banks and is led by the Board of Governors in Washington DC.

It's role is to develop and implement monetary policies which enhances stable prices, maximum employment and moderate interest rates.

The Federal Reserve was granted independence by Congress, from both the legislative and executive branches of government. This independence enable it to have a longer length of term for members and it's own funding mechanism.

The independence of the Federal reserve helps it continue to pursue its goals and objectives based on long-term analysis and data and not influenced by political changes and interference.

If the Federal Reserve was not independent, it could be influenced by politicians to make short-term policies that might hurt the economy.