UPSC Prelims Practice Questions — ‘ECB may need to act on not too persistent’ inflation surge’

Q1. Within the European Central Bank, which body is responsible for taking the key interest-rate (monetary policy) decisions referred to in Lagarde's 2026 remarks?

  • A. The Governing Council
  • B. The Executive Board
  • C. The General Council
  • D. The European Systemic Risk Board

Q2. In the context of the ECB's policy framework underlying Lagarde's 2026 remarks, what is meant by its 'symmetric' 2% inflation target?

  • A. Both positive and negative deviations from the 2% medium-term target are treated as equally undesirable
  • B. Inflation must be held strictly below, but close to, 2% as a ceiling
  • C. The 2% target applies symmetrically to both headline and core inflation measured separately
  • D. The target is split equally between the ECB and the national central banks of the euro area