Roles and Importance of Central Bank

Which among these is not a well known Central Bank ?

• The Federal Reserve Bank of the USA

• Bank of Japan

• The Bank of England

• The European Central Bank

• The Reserve Bank of India

Who owns the Central Bank?

• Prime Minister

• People

• Government

• President

Which of the following are common functions of the central bank?

• Conduct of monetary policy

• Lending to the general public

• Supervising the stock market

• Lending to the commercial banking system

Which of the following functions of a central bank may potentially conflict with its monetary policy role?

• Manager of the national debt

• Supervisor of the banking system.

• Issuer of currency

• Banker to the banking system

• Banker to the government

Assume that there is an increase in money's own rate, all other interest rates remaining unchanged. Which of the following is likely to describe the effect upon the demand for money and the demand for loans?

• Money D falls, loan D increases.

• Money D and loan D increase.

• Money D and loan D fall.

• Money D increases, loan D falls.

Which of the following is not the function of the commercial bank?

• Issue of currencies

• Acceptance of deposits

• Advancing loans

• Credit control

Who gave their central banks the power to decide the rate of interest ?

• Bank Manager

• Prime Minister

• Finance Minister

• Government

A Central Bank is unlikely to be tempted to lower the rate of interest to win the public support.

• True

• False