Which of the following best explains why independent central banks need to be held accountable?
A)Central banks are used to serving politicians.
B)They would not otherwise be able to pursue the goal of price stability.
C)Central bank independence can be taken too far.
D)Central banks are prone to causing political business cycles.
E)Central banks do not understand political issues.

Question

Quizplus · Accepted Answer

Central bank independence is crucial for maintaining price stability and avoiding political interference in monetary policy. However, without accountability, there's a risk that this independence could lead to decisions that are not in the public interest or that neglect the economic realities faced by the population. Accountability mechanisms ensure that while central banks operate independently, they still align their actions with broader economic goals and respond to the needs of the society they serve.

Which of the Following Best Explains Why Independent Central Banks