The central bank of Rudisia purchases government bonds by using the money that commercial banks keep as deposits with the central bank. It pays an interest of 2 percent on the deposits and charges the commercial banks about 2.5 percent per check for processing checks. It sends back the extra money to the government treasury. Therefore, it can be said that:
a. the central bank of the country is
financially self-supporting.
b. the central bank of the country acts as the treasurer of the government.
c. the central bank of the country acts as the lender of the last resort of the government.
d. the central bank of the country ensures that the deposits of customers are insured.
a
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What is fiscal policy, who makes it, and what is it designed to influence?
What will be an ideal response?