A currency drain ________ the amount of bank reserves available to banks to make loans because ________.
A)reduces;people are holding less money outside of the banks
B)reduces;people are holding more money outside of the banks
C)increases;people are holding less money outside of the banks
D)reduces;people are holding onto the money the banks could have borrowed from the Reserve Bank
E)increases;people are holding more money outside of the banks

Question

Quizplus · Accepted Answer

A currency drain reduces the amount of currency held within banks, which means people are holding more money outside of the banks. This, in turn, reduces the amount of bank reserves available to banks to make loans.

A Currency Drain ________ the Amount of Bank Reserves Available