Match the following:
| 1. | Currency authority | A. | Lender's last resort |
| 2. | Banker to the government | B. | Bank of Issue |
| 3. | Banker's bank | C. | Periodic inspection |
| 4. | Supervisor | D. | Managing public debt |
Answer & explanation
Correct answer: option 2
The correct answer is Option 2: 1-B, 2-D, 3-A, 4-C
| 1. | Currency authority | B.Bank of Issue | |
| 2. | Banker to the government | D.Managing public debt | |
| 3. | Banker's bank | A.Lender's last resort | |
| 4. | Supervisor | C.Periodic inspection | |
The central bank performs the following functions:
- Currency authority: The central bank has the right to issue the currency, also known as the bank of issue.
- Banker to the government: It performs all the functions of the government including granting land, managing public debt, advising the government, and agent to the government.
- Banker's bank: It acts as custodian of cash reserve, provides centralized clearing, and is the lender of last resort.
- Supervisor: It also carries periodic inspection of banks.