Explain Two Concepts of Central Bank Independence

question 69

Essay

Explain two concepts of central bank independence. Is the Fed politically independent? Why do economists think central bank independence is important?

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Definitions:

Openness

One of the five major personality traits characterized by an appreciation for art, emotion, adventure, unusual ideas, curiosity, and variety of experience.

Nonconformist

An individual who does not follow accepted beliefs, customs, or practices, often through deliberate choice.

Five-factor Model

A theoretical model describing human personality through five broad dimensions: openness, conscientiousness, extraversion, agreeableness, and neuroticism.

Neuroticism

A personality trait characterized by mood instability, anxiety, worry, fear, depression, and other emotional states.