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Questions and Answers
What is the primary function of a central bank?
What is the primary function of a central bank?
- Regulating monetary policy (correct)
- Issuing currency
- Managing government expenditure
- Supervising commercial banks
Which of the following is a tool used by central banks to implement monetary policy?
Which of the following is a tool used by central banks to implement monetary policy?
- Setting fiscal policy
- Regulating trade tariffs
- Open market operations (correct)
- Issuing treasury bonds
What impact does central bank policy have on interest rates?
What impact does central bank policy have on interest rates?
- Controls stock market performance
- Influences the level of interest rates (correct)
- Affects inflation expectations
- Determines exchange rates
