MACRO L8 - Central Bank and Money Supply (X)

Question 1

what is the central bank

Answer 1

Banker to the banks and the government; it oversees the banking system, implements monetary policy, and issues currency

Question 2

what are the central bank roles

Answer 2

• Oversee the monetary system and ensure stability and efficiency of MFIs
• Act as government’s agent, as its banker and in carrying out monetary policy

Question 3

what are the 6 functions of the Bank of England

Answer 3

1. issues notes
2. acts as a bank to gov, banks
3. operates monetary policy
4. provides liquidity to banks
5. oversees the activities of banks and other financial institutions
6. operates exchange rate policy and manages reserves