A central bank serves the nation
A) as a source of consumer credit when otherwise not available.
B) by regulating money supply growth.
C) as a secondary source of funds for home financing.
D) as the strong right arm of the U.S. Treasury.

Question

Quizplus · Accepted Answer

The primary role of a central bank is to regulate the growth of money supply in an economy. This is achieved through various means such as setting interest rates, influencing borrowing and lending practices of financial institutions, and controlling the circulation of currency. While consumer credit and home financing may indirectly benefit from a stable and well-managed economy, they are not the direct responsibility of a central bank. Additionally, while a central bank may work closely with the U.S. Treasury, it is not synonymous with it and serves a broader purpose for the nation.

A Central Bank Serves the Nation