Question
Explain 'government's banker' function of the central bank.

Answer

Central bank is banker to the government like commercial banks are to be public. It accepts deposits from government and gives loans to the government.

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Similar questions

From the following data calculate net national product at factor cost by (a) income method (b) expenditure method:
    (Rs. in crores)
1 Current transfers from rest of the worth. 100
2 Government final consumption expenditure. 1,000
3 Wages and salaries. 3,800
4 Dividend. 500
5 Rent. 200
6 Interest. 150
7 Net domestic capital formation. 500
8 Profits. 800
9 Employers' contribution to social security schemes. 200
10 Net exports. (-)50
11 Net factor income from abroad. (-)30
12 Consumption of fixed capital. 40
13 Private final consumption expenditure. 4,000
14 Net indirect tax. 300
Calculate (a) Operating Surplus, and (b) Domestic Income:
S. No.
 
(₹ in crores)
(i)
Compensation of employees.
2,000
(ii)
Rent and interest.
800
(iii)
Indirect taxes.
120
(iv)
Corporation tax.
460
(v)
Consumption of fixed capital.
100
(vi)
Subsidies.
2
(vii)
Dividend.
940
(viii)
Undistributed profits.
300
(ix)
Net factor income to abroad.
150
(x)
Mixed income.
200
What are impacts or effects of excess demand on price, output, employment?
Explain the role of "open market operations" in reducing money supply.
OR
What are open market operations? How do these affect availability of credit?

OR
How does a central bank influence credit creation by commercial banks by open market operations? Explain.
An economy is in equilibrium. From the following data about an economy, calculate investment expenditure:
  1. Income = 10000
  2. Marginal propensity to consume = 0.9
  3. Autonomous consumption = 100
Explain the meaning and two merits of fixed foreign exchange rate.
Calculate marginal propensity to consume from the following data about an economy which is in equilibrium:
National income = 1500
Autonomous consumption expenditure = 200
Investment expenditure= 300
The following figures are based on the balance of payments accounts:
S.No.
 
(₹ in crores)
1.
Imports of goods.
400
2.
Export of goods.
340
3.
Shipping.
3
4.
Travel Tourism, etc.
5
5.
Interest, dividends, profits.
50
6.
Unilateral Transfers.
40
Calculate Balance of Trade.
How does a commercial bank create money?
If MPC is one-fourth of MPS and consumption at zero level of national income is ₹ 50 crore, derive the consumption and saving function.