Central Bank Functions and Monetary Policy Quiz
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Questions and Answers

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?

  • Setting fiscal policy
  • Regulating trade tariffs
  • Open market operations (correct)
  • Issuing treasury bonds

    • 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

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