Maharashtra State Board course HSC Science (Computer Science) 12th Board Exam
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State with Reason Whether You Agree Or Disagree with the Following Statement. Central Bank is the Bank of Issue. - Economics

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Question

State with reason whether you agree or disagree with the following statement.

Central Bank is the Bank of Issue. 

Solution

Yes, the above statement is true. The Central Bank is the sole entity that can print currency notes. In other words, the central bank of a country has the exclusive authority to issue currency (notes + coins). The currency issued by the central bank is known as 'legal tender money' i.e. the value of such currency is backed by the central bank. Since, issuance of notes is exclusively reserved for the Central Bank, it is said to be the ‘Bank of Issue’.

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APPEARS IN

 Micheal Vaz Solution for Micheal Vaz Class 12 Economics (2019 to Current)
Chapter 13: Central Banking
Exercise | Q: 1.1 | Page no. 122
Solution State with Reason Whether You Agree Or Disagree with the Following Statement. Central Bank is the Bank of Issue. Concept: Monetary Function of Central Bank.
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