When a commercial bank faces a sudden run and no one else will lend to it, the RBI can lend to it as the

lender of last resortCorrect answerYour answerbank of issueCorrect answerYour answercustodian of forex reservesCorrect answerYour answergovernment's bankerCorrect answerYour answer

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Correct answer: A

As lender of last resort, the central bank supplies cash to a sound bank in trouble, which protects depositors and the system.

Concept: Lender of last resort
Typical timeTypical: 70 s
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The rule this testsFunctions of the central bank

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Ten questions from The Central Bank & Monetary Policy, at your own pace.

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When a commercial bank faces a sudden run and no one else will lend to it, the RBI can lend to it as the

Explanation