What are the three main functions a central bank performs in its role as a bankers bank?
What will be an ideal response?
The three functions are: provide loans during times of financial stress; manage the payments system; and oversee commercial banks and the financial system.
You might also like to view...
If the government were to restrict consumption to the efficient level in a market where a negative externality is present, the market outcome:
A. would not be efficient. B. would then be efficient. C. would be equitable. D. None of these statements is necessarily true.
Which of the following factors affects the quantity demanded of a company's stock?
a. The prices of other companies' stocks b. The price of the company's stock c. The returns on other possible investments d. Expectations regarding stock price movements e. Income of the investors
Suppose that a market that is a natural monopoly has three producers providing the good to this market. This situation will a. result in lower prices for consumers under all circumstances
b. result in higher average costs for each producer than if there were only a single producer. c. result in all firms taking full advantage of economies of scale in the production of the good. d. result in a more efficient outcome than the market with fewer producers.
In the short-run, can a firm stay in the market if its profit is negative?
A. Yes, because it may have contracts requiring it to stay open. B. No, shutting down is the best option when profits are negative. C. No, its investors will require it to shut down if it has negative profits. D. Yes, if operating minimizes its losses.