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Question
To ensure that the citizens of the country have faith in the currency, the currency is issued by:
Options
Commercial banks
Central government
Central bank
Ministry of finance
Solution
Central bank
Explanation:
- The currency issue is the responsibility of a country's central bank (in India, the Reserve Bank of India).
- The central bank guarantees that citizens have faith in the currency by maintaining its honesty and stability.
- The central bank's currency is government-backed, but the central bank is responsible for issuing it, not commercial banks or the Ministry of Finance.
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