Question

With reference to the Central Bank, explain the following: 

Monopoly of note issue

Explain the following:

Monopoly of Issue of Notes

Answer 1

The Central Bank of a country has the exclusive right (monopoly right) of issuing notes. This is called the currency authority function of the central bank. Actually, till the beginning of the 20th century, the central bank was known as the Bank of Issue. The notes issued by the central bank are a legal tender of unlimited value.