The Central Bank controls money supply through all the following except
Answer Details
The Central Bank is responsible for controlling the money supply in an economy to achieve its monetary policy objectives. This is done through a variety of tools, including lending to the public, setting the bank rate, imposing legal reserve requirements, and conducting open market operations.
Out of the options provided, the Central Bank does not control money supply through lending to the public. While the Central Bank may lend money to commercial banks or other financial institutions, it does not directly lend to the public.
Instead, the Central Bank controls the money supply through the other options listed. The bank rate is the interest rate at which the Central Bank lends money to commercial banks, and changes to the bank rate can influence the cost of borrowing and the level of economic activity. Legal reserve requirements are the amount of money that banks are required to hold in reserve, and changes to these requirements can affect the amount of money that banks have available to lend. Finally, open market operations involve the buying and selling of government securities, which can influence the amount of money in circulation in the economy.
Therefore, the Central Bank controls money supply through bank rate, legal reserve requirements, and open market operations, but not through lending directly to the public.