Why might eliminating the Fed's independence lead to a more pronounced political business cycle?

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Why might eliminating the Fed's independence lead to a more pronounced political business cycle?



Answer: Eliminating the Fed's independence might make it more shortsighted and subject to political influence. Thus, when political gains could be achieved by expansionary policy before an election, the Fed might be more likely to engage in this activity, As a result more pronounced political business cycles might result.

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