Question

State whether you agree or disagree. Give reasons.
Central Bank having monopoly of note issue is most appropriate institute of the government.

Answer 1

Central bank is an apex bank that controls the entire banking system of a country. Central bank has monopoly rights of issuing notes. This is called currency authority function of central banks. All notes issued by central bank are an unlimited legal tender in the country. Therefore with such a monopoly right given to an institution makes it the most appropriate institute for the government as government can also control the amount of money supply from this function of the central bank.