please explain all parts of the question 8 Central Banks such as the Federal Res

Question

please explain all parts of the question

8 Central Banks such as the Federal Reserve in the USA and the Bank of England in the UK operate monetary paicy. Which of the folowing statements is not correct? (a) Many central banks aim to control the rate of inflation. Some central banks are con- cemed aboul both inflation and the level of unemployment. (b) No ceniral banks ever allows other banks to become bankrupt. (c) Some central banks buy both government and private sector bonds. (d) Many central banks control the interest rate but not the money supply.

Explanation / Answer

The correct answers are B and C. Central banks cant always control when commercial banks become bankrupt and also central banks will never be involved in the purchase of private sector bonds. The correct answers are thus B and C.

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