Which function is performed by both commercial banks and central banks ?
Correct answer: C. Dealing in foreign exchange
- A. Acting as bankers to the government
- B. Advising the government on monetary policy
- C. Dealing in foreign exchange
- D. Fixing the main interest rate
Explanation
Both types of banks may deal in foreign exchange, such as buying and selling foreign currencies. Acting as the government’s banker and fixing policy rates are primarily central-bank functions.
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The economy is studied as a whole through national income, gross domestic product, inflation, unemployment, economic growth and business cycles. Coverage includes aggregate demand and supply, consumption and investment, money and banking, fiscal and monetary policy, exchange rates and balance of payments, which distinguishes macroeconomics from the study of individual markets.
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