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Which type of currency is issued by Central Bank?
Currency
Credit Money
Coins
All of these
- Option 1: Currency
- Central banks issue paper money, which is also known as currency.
- This includes banknotes that people use in daily transactions.
- Correct Answer: Currency
- Option 2: Credit Money
- This refers to any form of money that is not backed by physical reserves, like credit cards or loans.
- Central banks do not directly issue credit money; banks create it through lending.
- Option 3: Coins
- Issued by central banks or government mints, coins are typically used for smaller transactions.
- They complement paper currency in the money supply.
- Option 4: All of these
- This option suggests all forms are issued by central banks.
- While central banks issue currency and coins, they don’t issue credit money directly.
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