Financial Institutions 2 (Central Bank)

What is the main responsibility of a Central Bank?

• Managing a country's money supply and regulating the banking industry

• Providing loans to individuals

• Issuing credit cards to the public

• Investing in the stock market

Which of the following is NOT a characteristic of Central Banks?

• There is only one central bank in a country

• Operated for profit

• Owned by the government and are public corporations

• Deal with only banks and governments

What is the function of a Central Bank as a 'Lender of last Resort'?

• Intervene and lend money to banks in financial crisis

• Provide financial advice to individuals

• Offer investment opportunities to the public

• Manage foreign exchange reserves

What does a Central Bank manage in terms of foreign exchange?

• Stock market investments

• Cryptocurrency exchanges

• Real estate properties

• Foreign exchange reserves of the country

What is the purpose of conducting Monetary Policy by Central Banks?

• Achieve certain macroeconomic goals

• Increase inflation rates

• Encourage bank runs

• Promote unemployment

Which of the following is a liability of Central Banks?

• Currency in Circulation

• Commercial Bank loans

• Foreign Exchange Reserves and gold holdings

• Government Securities

In most countries, which organisation controls the banking system?

• central bank

• World Bank

• commercial bank

• investment bank

What is not normally a function of the central bank of a country?

• issuing notes and coins

• acting as lender of last resort

• setting the government budget

• operating the government monetary policy