Question

Explain any two functions of a central bank of a country.

Answer 1

The main function of a central bank is to act as governor of the machinery of credit in order to secure stability of prices.

It regulates the volume of credit and currency, pumping in more money when market is dry of cash, and pumping out money when there is excess of credit.

Answer 2

Answer:

• Government's bank.
• Controller of credit.