GCEEconomicsMoney and Banking2019

One major reason why the Central Bank of Nigeria is described as the 'lender of last resort' is that it

Agrants long-term development loans to state governments
Bprovides emergency funds to commercial banks facing liquidity crisesCORRECT
Clends money directly to members of the public at low interest rates
Dfinances the budget deficit of the federal government at zero interest
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Why the answer is B, and why the others tempt you.
The lender of last resort function means the Central Bank stands ready to provide emergency liquidity support to solvent commercial banks that are temporarily unable to meet their obligations, thereby preventing bank runs and systemic financial collapse. This function does not involve lending to the general public or state governments, nor does it necessarily involve zero-interest financing of government deficits.
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