Question

Which of the following is not the main reason for giving the monopoly right of note-issue to the central bank?

• A. It gives a distinctive prestige to the note issuer.
• B. It enables the central bank to exercise control over the supply of money in the economy.
• C. It brings a difference in note circulation.
• D. It enables the government to supervise the supply of money in the economy.

Answer 1

The correct option is C

It brings a difference in note circulation.

According to De Kock, the central bank brings about uniformity in note circulation. Hence, it is the main reason for giving the monopoly right of note-issue to the central bank.