Text 1: Economist Dr. Helen Stone supports central bank independence. "Insulating monetary policy from electoral pressure prevents inflation bias," Stone argues. "Politicians prefer short-term stimulus. Independent experts make better long-term decisions."
Text 2: Democratic theorist Dr. James Wong questions technocratic insulation. "Monetary policy has profound distributional consequences," Wong contends. "Interest rate decisions affect employment and inequality. Removing such choices from democratic accountability raises legitimacy concerns."
What trade-off do Stone and Wong represent in institutional design?
Technical expertise versus democratic accountability
High interest rates versus low interest rates
Economic growth versus environmental protection
Employment versus inflation only
Correct Answer: A
Choice A is the correct answer. Stone values expert judgment insulated from politics. Wong values democratic accountability for consequential decisions. The trade-off is expertise/insulation vs. accountability/democracy.
- Evidence: Stone: experts make better decisions; Wong: legitimacy requires accountability.
- Reasoning: Both values are genuine; they conflict.
- Conclusion: The debate represents expertise vs. democracy trade-off.
Choice B is incorrect because interest rate levels aren't the dispute. Choice C is incorrect because environment isn't discussed. Choice D is incorrect because Wong emphasizes distributional effects beyond the standard trade-off.