1a. Which of the following are duties of the Board of Governors of the Federal Reserve System?

A) Setting margin requirements, the fraction of the purchase price of securities that has to be paid for with cash.

B) Setting the maximum interest rates payable on certain types of time deposits under Regulation Q.

C) Regulating credit with the approval of the President under the Credit Control Act of 1969.

D) None of the above has been a duty of the Board since the mid-1980s.

1b. Cross-country evidence suggests that an increase in central bank independence results in a ________ inflation rate and ________ unemployment.

A) lower; higher

B) lower; no worse

C) higher; lower

D) higher; higher