Answer the following questions: 1. Central Bank of the country has a monopoly of note issue. Explain.

Answer the following questions:

1. Central Bank of the country has a monopoly of note issue. Explain.

Answer: 

1. In India, The Central Bank is the sole entity that can print currency notes. In other words, the central bank of a country has exclusive authority to issue currency. The currency issued by the central bank is known as 'legal tender money' i.e. the value of such currency is backed by the central bank. Since, issuance of notes is exclusively reserved for the central bank, it can be said that the Central bank of a country has the monopoly over the issuance of notes.

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