A central bank may find it politically attractive to keep inflation in check, so stimulating the economy takes a secondary position.

Question

Quizplus · Accepted Answer

Central banks typically prioritize stimulating the economy over keeping inflation in check, as their main goal is to promote economic growth and stability. However, in some cases, there may be political pressure to keep inflation low, even if it means sacrificing short-term economic growth. Ultimately, the priorities of a central bank may be influenced by a range of factors, including economic conditions, political realities, and institutional mandates.

A Central Bank May Find It Politically Attractive to Keep