Roles of central bank include the following except

ECONOMICS
POST UTME OAU

Roles of central bank include the following except

  • A) Lender of last resort to commercial bank
  • B) Banker to commercial bank
  • C) Regulator of both the money and capital markets
  • D) Receipt of government deposits

Correct Answer: B) Banker to commercial bank

Explanation

The question is asking us to identify the role of the central bank that is not included among the options provided. The options are A, B, C, and D. We need to choose the option that does not represent a role of the central bank.

The central bank is the bank that is responsible for the management of a country's money supply and monetary policy. It is also responsible for regulating the banking industry within the country. The central bank acts as a banker to the commercial banks, providing them with loans and other financial services. This is known as the lender of last resort function, which allows commercial banks to access funds when they are in need of liquidity.

The central bank is also responsible for regulating both the money and capital markets. This involves ensuring that the financial system is stable and that there is no systemic risk that could destabilize the economy. Additionally, the central bank can receive government deposits, which helps the government to manage its finances and provides the central bank with additional funds.

Based on the options provided, the correct answer is option B. This is because the central bank acts as a banker to commercial banks, providing them with financial services, making it one of its roles. Therefore, the roles of the central bank include lender of last resort to commercial banks, regulator of both the money and capital markets, and receipt of government deposits.

To learn more about this, please read the relevant sections of the recommended textbooks.



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