Identify the money market instrument, which meets Central Government need of Shirt-term funds :

Treasury Bill

The correct answer is option (3) : Treasury Bill

The money market instrument that meets the Central Government's need for short-term funds is:

(3) Treasury Bill

Treasury bills are short-term debt instruments issued by the Central Government to raise funds for a short duration, typically with maturities ranging from a few days to one year. They are considered one of the safest and most liquid money market instruments.

Other options

Call Money: Call money is a short-term borrowing and lending of funds among banks and financial institutions. It is typically used for interbank transactions and is usually of very short duration, often overnight. Banks borrow and lend funds to manage their short-term liquidity needs.

Certificate of Deposit: Certificates of Deposit (CDs) are interest-bearing time deposits offered by banks. They are issued for fixed periods, ranging from a few months to several years. Investors deposit a specific amount of money with a bank, and in return, they receive the principal amount along with interest when the CD matures. CDs are used for both short-term and longer-term savings.

Commercial Paper: Commercial paper is a short-term unsecured promissory note issued by corporations and financial institutions to raise funds. It typically has maturities ranging from a few days to a few months. Commercial paper is a cost-effective way for companies to access short-term financing and is often used to meet working capital and short-term funding needs.