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Which four responsibilities describe a central bank at work today?
AMonetary policy, tax collection, auditing, note printing
BMonetary policy, credit rules, currency, check clearing
CDeposit insurance, credit rules, lending, share dealing
DMonetary policy, share pricing, insurance, note printing
Answer & Solution
Correct answer: B. Monetary policy, credit rules, currency, check clearing
1. The four most important responsibilities are carrying out monetary policy, setting rules on credit, distributing currency and making cheque clearing easier.
2. Distributing currency means passing out coins and notes, not printing them, since the treasury does the minting and printing.
3. Collecting taxes and auditing are functions of other arms of government.
4. Pricing shares and selling insurance belong to brokerage firms and insurance companies, which are separate institutions altogether.
_Source: OpenStax Introduction to Business (CC BY 4.0), Ch 15 "Understanding Money and Financial Institutions", section 15.2 The Federal Reserve System_
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