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WAEC Economics 2005 Question 33

Question 33

Financial Institutions

The lender of last resort in the banking system is the

  1. A.industrial bank
  2. B.mortgage bank
  3. C.commercial bank
  4. D.central bank.
Show the answer and explanation

Answer: D (central bank.)

Explanation

The central bank lends to commercial banks when they cannot get funds elsewhere.