1. What is financial stability?

2. Government is the custodian of Central bank. Justify this statement.

3. How is financial stability achieved domestically?

4. CB acts as the custodian to the reserves of other banks. Justify this statement.

5. Explain the process of settling interbank claims with an example.

6. Name 3 payment systems and explain each system briefly.

7. Lender of the last resort function of CB is a financial stability issue. Explain.

8. What is the required reserve? Explain.

9. What is the difference between the exchequer account and the paymaster's general account?

10.The IBR model is a variation of the firmBR model. Explain.