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Question
The main advantage of giving the monopoly right of note issue to the central bank is that it ______.
Options
Brings uniformity
Increases public confidence
Exercises better control over the money supply
All of the above
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Solution
All of the above
Explanation:
Following are the main reasons for giving the monopoly right of note-issue to the central bank.
- It brings about uniformity in note circulation.
- It is easier to control money supply when there is a single agency of note issue.
- It keeps the public faith in the paper currency.
- It helps in the stabilisation of the internal and external value of the currency.
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