O Levels Economics (2281)•2281/12/O/N/24

Explanation
Central banks focus on economic stability
Steps:
- Recall the primary functions of central banks, such as monetary policy and regulation.
- Identify that price stability prevents inflation or deflation to support steady growth.
- Eliminate options unrelated to core mandates like issuing currency or supervising banks.
- Select the option aligning with official goals, like the Federal Reserve's dual mandate.
Why A is correct:
- Central banks, per their legal mandates (e.g., Federal Reserve Act), target low and stable inflation to foster economic predictability.
Why the others are wrong:
- B: Credit cards are issued by commercial banks, not central banks.
- C: Loans to producers are handled by commercial or development banks, not central banks.
- D: Savings accounts are provided by retail banks for consumers, not central banks.
Final answer: A
Topic: Monetary policy
Practice more O Levels Economics (2281) questions on mMCQ.me