The primary objective of many central banks, including the Reserve Bank of India and the Bank of Korea, is price stability. Briefly explain why.   Q270: Reflecting the current extremely low long-term...

the Reserve Bank of India and the Bank of Korea, is price

stability. Briefly explain why.

Q270: Reflecting the current extremely low long-term interest

rates in the Eurozone,
The Economist
notes: “Higher

Inflation may be needed to leave extra- low interest rates

behind”. Explain how long-term interest rates and inflation

are related. Why would this statement make sense in

terms of interest rate forecasting?