Currency outside of banks increases from $100 million to $200 million. This change is considered
A) a currency drain.
B) a decrease in the monetary base.
C) expansionary monetary policy.
D) contractionary monetary policy.

Question

Quizplus · Accepted Answer

A currency drain refers to the movement of currency from banks into the hands of the public. An increase from $100 million to $200 million in currency outside of banks exemplifies this phenomenon, as more money is being held by the public rather than deposited in banks.

Currency Outside of Banks Increases from $100 Million to $200