Central Bank Independence Refers to Situations in Which Central Bankers

question 31

Multiple Choice

Central bank independence refers to situations in which central bankers:

• A)conduct open market operations in free markets.
• B)operate in countries with independently elected governments.
• C)are insulated from short-term political considerations.
• D)are appointed without confirmation hearings.

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Definitions:

Deadweight Loss

A loss of economic efficiency that can occur when the equilibrium for a good or service is not achieved or is not achievable.

Consumer Surplus

The difference between what consumers are willing to pay for a good or service and what they actually pay.

Producer Surplus

The difference between the price that suppliers actually receive and the minimum price they would be willing to accept. It measures the net gains to producers and resource suppliers from market exchange. It is not the same as profit.

Soft Coal

Another term for bituminous coal; a type of coal known for its high moisture content and smoke-producing properties.