Target Exam

CUET

Subject

Economics

Chapter

Macro Economics: Money and Banking

Question:

Which of the following is NOT a function of central bank?

Options:

Provides banking facilities to the government

Lends to the government 

Lends to commercial banks

None of the above

Correct Answer:

None of the above

Explanation:

The correct answer is option 4: None of the above

All of the listed options are indeed functions of a central bank:

  • Providing banking facilities to the government is a core function, as the central bank acts as the government's banker.
  • Lending to the government happens through ways such as the issuance of government bonds or temporary loans.
  • Lending to commercial banks is a regular function of central banks, often done through mechanisms like repo operations.