Most economists agree that a well-designed central bank would:

Question

Quizplus · Accepted Answer

The independence of a central bank from political pressure allows it to make monetary policy decisions based solely on economic considerations, without being swayed by political agendas or pressures. This is widely recognized as a key aspect of any well-designed central bank.

B, C, and D are not desirable characteristics for a well-designed central bank. Making policy actions difficult to interpret could create confusion and unpredictability in the markets, which can be detrimental to economic stability. Being accountable only to other banks could mean that the central bank is not sufficiently transparent or accountable to the public, which is important for maintaining public trust. Finally, having one key policy maker could mean that there is a risk of decision-making being overly concentrated in one individual, which may not be in the best interest of the economy or the financial system as a whole.

Most Economists Agree That a Well-Designed Central Bank Would