The ultimate source of liquidity in a modern industrial economy is the
A) government Treasury.
B) central bank.
C) capital market.
D) liquidity market.

Question

Quizplus · Accepted Answer

The ultimate source of liquidity in a modern industrial economy is the central bank, which has the authority to create and control the money supply. The central bank's ability to lend money to commercial banks and other financial institutions through various instruments, such as open market operations and discount window lending, ensures that there is adequate liquidity in the system to meet the demands of individuals and businesses.

The Ultimate Source of Liquidity in a Modern Industrial Economy