Practicing Success
Which of the following is not a function of the Central Bank? |
Bank rate Open market operation Lender of last resort Deficit financing |
Deficit financing |
The function that is not typically associated with the Central Bank is: Deficit financing Deficit financing is a fiscal function, not a monetary function, and is related to government budgetary policies rather than the operations of the Central Bank. It involves financing government expenditures by borrowing or printing money, and it falls under the purview of fiscal policy rather than monetary policy. The other options—bank rate, open market operation, and lender of last resort—are functions commonly associated with the Central Bank's monetary policy tools. |