Practicing Success

Target Exam

CUET

Subject

General Test

Chapter

General Knowledge

Topic

Economics

Question:

Which of the following is a "Function" of a central bank of a country?

Options:

Controls money supply

Banker to the government

Custodian of the forex reserves

All of the above

Correct Answer:

All of the above

Explanation:

Central bank has several important functions. It issues the currency of the country. It controls money supply of the country through various methods, like bank rate, open market operations and variations in reserve ratios. It acts as a banker to the government. It is the custodian of the foreign exchange reserves of the economy. It also acts as a bank to the banking system.