Answer: implement fiscal policy.

## Explanation **Correct Answer: A** **Why A is correct:** - Fiscal policy refers to government decisions about taxation and spending, which is typically implemented by the government (treasury/finance ministry) rather than the central bank. - Central banks are primarily responsible for monetary policy (interest rates, money supply), not fiscal policy. **Why B is incorrect:** - Central banks do oversee payment systems to ensure financial stability and smooth functioning of the economy's payment infrastructure. **Why C is incorrect:** - Central banks typically manage foreign currency reserves as part of their role in maintaining exchange rate stability and international financial operations. **Key Concepts:** - **Central Bank Functions:** 1. Monetary policy implementation 2. Banker to the government 3. Banker to commercial banks 4. Currency issuer 5. Foreign exchange management 6. Payment system oversight - **Fiscal Policy:** Implemented by government through budget decisions on taxation and expenditure. - **Monetary Policy:** Implemented by central bank through interest rates, reserve requirements, and open market operations.

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