Multiple choice

Which of the following is/are true with regard to the functions of central bank?

(i) Custodian of cash reserves of commercial banks (ii) Custody and management of foreign exchange reserves (iii) Clearing house for transfer and settlement. (iv) Lender of the last resorts.

  1. (i) and (ii)

  2. (ii) and (iii)

  3. (iii) and (iv)

  4. All of these
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Functions of a central bank:

Regulator of Currency

Banker, fiscal agent and adviser to the government

Custodian of cash reserves of commercial banks

Custody and management of foreign exchange reserves

Lender of the last resort

Clearing house for transfer and settlement

Controller of credit

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