When monetary policy becomes highly politicized, the policy tends to:

Question

Quizplus · Accepted Answer

When monetary policy becomes highly politicized, it becomes subject to political pressures and may be implemented to serve political interests rather than economic goals. This can lead to destabilizing effects on the economy, as policy decisions may not be based on sound economic principles. Additionally, the independence of the central bank may be compromised, which can further undermine the effectiveness of monetary policy.

When Monetary Policy Becomes Highly Politicized, the Policy Tends To