Question

which best describes a central bank’s primary goals?
○ limiting inflation and reducing unemployment
○ reducing unemployment and maintaining cash flow
○ controlling stagflation and reducing unemployment
○ managing credit and ensuring the money supply’s liquidity

Explanation:

Central banks (e.g., the Federal Reserve) aim to maintain price stability (limiting inflation) and promote maximum employment (reducing unemployment). Other options are incorrect: maintaining cash flow is not a primary goal, stagflation control is not a direct primary goal, and managing credit/liquidity is part of tools, not primary goals.

Answer:

A. limiting inflation and reducing unemployment