The essential functions of any central bank are:
A) managing the money supply, and acting as a lender of last resort.
B) overseeing major business transactions, and managing the money supply.
C) preventing the formulation of monopolies or other market failure, and acting as a lender of last resort.
D) collecting taxes, and managing the supply of money.

Question

Quizplus · Accepted Answer

The essential functions of any central bank are managing the money supply and acting as a lender of last resort. The central bank controls the monetary policy, regulates the money supply and interest rates, and maintains financial stability by acting as a lender of last resort to provide liquidity to the financial system in times of need. The remaining choices are incorrect since they do not align with the primary functions of a central bank.

The Essential Functions of Any Central Bank Are