Economics · Central Banking Functions
The lender-of-last-resort function of a central bank is significant because panic or temporary liquidity shortage in a financial institution may otherwise spread instability. This function refers to the central bank's role in:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
Share:
- 1providing emergency liquidity to solvent financial institutions facing temporary liquidity distress✓
- 2replacing insolvency resolution mechanisms
- 3guaranteeing equity returns to bank shareholders
- 4financing all government expenditure during stress
Correct answer
providing emergency liquidity to solvent financial institutions facing temporary liquidity distress
Download Single Question PDF
Save this question and verified answer as a clean study sheet with live clickable link.
👥
Share with Friends & Study Groups
Challenge your peer aspirants on WhatsApp or Telegram to solve this question!
Online Test Series
Start Free Mock Test →Preparing for Economics?
Practice full-length mock tests with real exam timers, instant score analysis, and all-India ranking.
Chapter Practice
Practice Central Banking Functions MCQs →Want more practice questions on Central Banking Functions?
Solve complete topic-wise tests with detailed solutions on GkGet.
Related Practice Questions
Recommended practice questions in Economics · Central Banking Functions