What is the essential function of any central bank? I. Managing the money supply
II. Acting as a lender of last resort
III. Overseeing major business transactions
IV. Preventing the formulation of monopolies
V. Collecting taxes
A) I and II only
B) I and III only
C) I, II, III, and IV
D) I, II, III, IV, and V

Question

Quizplus · Accepted Answer

The essential function of any central bank is to manage the money supply and act as a lender of last resort. The other options listed (overseeing major business transactions, preventing the formulation of monopolies, and collecting taxes) are not necessarily within the jurisdiction of a central bank.

What Is the Essential Function of Any Central Bank? I