Which of the following is a role of the central bank?

• A. Directly setting tax rates
• B. Issuing notes and coins
• C. Regulating environmental policy
• D. Controlling consumer loans for private individuals

Answer: (B)

Issuing notes and coins fits the central bank’s remit because the institution is responsible for the country’s currency and the monetary system. By producing banknotes and coins, the central bank provides the official medium of exchange and can influence the money supply, helping to keep prices stable. The other options lie outside the central bank’s typical responsibilities: tax rates are set through government fiscal policy; environmental policy is government policy; and private consumer lending is carried out by commercial banks and regulated banking authorities. So issuing notes and coins is the activity that aligns with the central bank’s role.