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Which one of the following is not a function of the Central Bank in an economy?
- a)Dealing with foreign exchange
- b)Controlling Monetary Policy
- c)Controlling government spending
- d)Acting as a banker's bank
Correct answer is option 'C'. Can you explain this answer?
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Which one of the following is not a function of the Central Bank in an...
The Central Bank in an economy typically does not control government spending; that is generally the role of the government's treasury or finance department. The Central Bank's functions typically include dealing with foreign exchange, controlling monetary policy through tools like interest rates and open market operations, and acting as a banker's bank by providing services to other banks in the country, such as facilitating the clearing system or serving as a lender of last resort. Controlling government spending, however, involves budgetary decisions made by the government itself, not the Central Bank.
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Which one of the following is not a function of the Central Bank in an economy? a)Dealing with foreign exchange b)Controlling Monetary Policy c)Controlling government spending d)Acting as a bankers bankCorrect answer is option 'C'. Can you explain this answer?
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