What is the role of central banks in the economy?

What is the role of central banks in the economy?

Central banks manage a country's currency, money supply, and interest rates, influencing economic stability.

How do central banks control inflation?

They adjust interest rates and use monetary policy tools to regulate the money supply, aiming to keep inflation in check.

What happens if a central bank fails?

A central bank failure can lead to economic instability, loss of confidence in the currency, and potential financial crises.

Can central banks influence employment rates?

Yes, by adjusting interest rates and stimulating economic growth, central banks can indirectly influence employment levels.

What are some examples of central banks?

Examples include the Federal Reserve in the U.S., the European Central Bank, and the Bank of England.