A country with a central bank that is not independent of external political pressure is a country that tends to have higher inflation.

Question

Quizplus · Accepted Answer

When a central bank is not independent of external political pressure, it may make decisions that prioritize political goals over economic goals, such as controlling inflation. This can lead to excessive money creation and higher inflation. Therefore, a lack of central bank independence tends to be associated with higher inflation.

A Country with a Central Bank That Is Not Independent