An increase in the currency drain
A) decreases the quantity of money.
B) decreases the monetary base.
C) increases banks' reserves.
D) increases banks' deposits.
E) has no effect on the amount of the monetary base or the quantity of money.

Question

Quizplus · Accepted Answer

An increase in currency drain means people are holding more money and not depositing it into banks. This decreases the amount of money in circulation, which in turn decreases the quantity of money.

An Increase in the Currency Drain