Central Bank Functions

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Questions and Answers

Which of the following is a primary function of a Central Bank?

  • Regulation of the financial system (correct)
  • Securing the payment system
  • Advising government on policy matters
  • Management of public debt

What is a Central Bank's role in the financial system?

  • Advisor to international institutions
  • Lender of last resort (correct)
  • Lender of first resort
  • Manager of foreign exchange

Which function is NOT a primary function of a Central Bank?

  • Management of public debt (correct)
  • Issuance of notes
  • Regulation of the financial system
  • Conduct of monetary policy

What is a secondary function of a Central Bank?

<p>Management of foreign exchange (C)</p> Signup and view all the answers

What is the purpose of a Central Bank's management of public debt?

<p>To support the government's financing needs (D)</p> Signup and view all the answers

What is the main objective of a Central Bank's lender of last resort function?

<p>To prevent the collapse of the financial system (B)</p> Signup and view all the answers

Which of the following functions is common to both primary and secondary functions of a Central Bank?

<p>Regulation of the financial system (D)</p> Signup and view all the answers

What is the primary function of a Central Bank related to the conduct of?

<p>Monetary policy (D)</p> Signup and view all the answers

Which secondary function of a Central Bank involves advising the government on?

<p>Policy matters (B)</p> Signup and view all the answers

What is the primary function of a Central Bank related to the issuance of?

<p>Notes (C)</p> Signup and view all the answers

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Study Notes

Central Bank Functions

  • Primary functions of Central Banks include:
    • Issuance of notes
    • Regulation of the financial system
    • Lender of last resort
    • Conduct of monetary policy

Secondary Functions

  • Secondary functions of Central Banks include:
    • Management of public debt
    • Management of foreign exchange
    • Advising government on policy matters
    • Securing the payment system
    • Maintaining relationships with international institutions

Central Bank Functions

  • Primary functions of Central Banks include:
    • Issuance of notes
    • Regulation of the financial system
    • Lender of last resort
    • Conduct of monetary policy

Secondary Functions

  • Secondary functions of Central Banks include:
    • Management of public debt
    • Management of foreign exchange
    • Advising government on policy matters
    • Securing the payment system
    • Maintaining relationships with international institutions

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