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WAEC Economics 2003 Question 34

Question 34

Financial Institutions

Which of the following is a function of the central bank?

  1. A.Accepting deposits from the public
  2. B.Lending to the commercial banks
  3. C.Discounting bills of exchange
  4. D.Agent of payment for individuals
Show the answer and explanation

Answer: B (Lending to the commercial banks)

Explanation

As the bankers' bank and lender of last resort, the central bank lends to commercial banks.