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Question
Observe the image and identify the function of Central Bank.
Options
Custodian of Foreign Exchange
The Clearing House Function
Lender of the Last Resort
Monopoly of Note Issue
MCQ
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Solution
Lender of the Last Resort
Explanation:
The image shows the central bank stepping in during a financial crisis to supply emergency liquidity and support failing banks, stabilising the banking system; therefore, it is a classic lender-of-last-resort function.
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