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Question
State with reasons whether you agree or disagree with the following statements.
Central Bank is the bank of note issue.
Central Bank is the bank of note issue.
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Solution
Yes, I do agree with this statement.Central bank has the monopoly of note-issue in every country. The currency notes printed and issued by the central bank are declared unlimited legal tender throughout the country.
Central bank has been given exclusive monopoly of note-issue in the interest of uniformity, better control, elasticity, supervision, and simplicity. It will also avoid the possibility of over-issue by individual banks. Thus, people’s confidence in the currency is maintained, and its supply is adjusted to demand in the economy.
The central bank also has to keep gold, silver or other securities against the notes issued.
The central banks, thus, regulate the currency of country and the total money-supply in the economy.
Central bank has the monopoly of note-issue in every country. The currency notes printed and issued by the central bank are declared unlimited legal tender throughout the country.
Central bank has been given exclusive monopoly of note-issue in the interest of uniformity, better control, elasticity, supervision, and simplicity. It will also avoid the possibility of over-issue by individual banks. Thus, people’s confidence in the currency is maintained, and its supply is adjusted to demand in the economy.
The central bank also has to keep gold, silver or other securities against the notes issued.
The central banks, thus, regulate the currency of country and the total money-supply in the economy.
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