Answer to Question #272039 in Economics for unknown

Question

What is the mission of a central bank? What is the difference between the economic stability and the financial stability parts of the mission of a central bank? 

Answer 1

Typically, central banks raise interest rates to slow growth and avoid inflation; they lower them to spur growth, industrial activity, and consumer spending. In this way, they manage monetary policy to guide the country's economy and achieve economic goals, such as full employment.

The primary goal of central banks is to provide their countries' currencies with price stability by controlling inflation. A central bank also acts as the regulatory authority of a country's monetary policy and is the sole provider and printer of notes and coins in circulation.