How significant a role do central banks play in economic growth?

Expert Solution

Hello,
Central Bank - Central bank is a Apex bank of the country, it is a financial institution control over the production and distribution of the money. It is responsible for the formulation of monetary policy.

Significant role of Central bank play Economic growth are-
Central bank in developing economy perform both the Traditional and non traditional functions. Traditional functions are -

Landers of last resort
bankers of bank
monopoly of note issues
maintenance of exchange rate

The Role of central bank is to generate employment, maintenance rising level of production. Aim of central bank is to improve currency and credit system in underdeveloped countries.
The central play an important role in proper adjustment between the demand and supply of money. Interest rate policy play an important role in development of economy, and it will also heilps in the Debt management (selling and buying of government bonds).

I hope this clear your doubt.

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jeff jeffy answered 6 months ago

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