A currency drain is
A)an increase in currency held outside banks.
B)when the Fed buys securities,but it is not when the Fed sells securities.
C)when the Fed sells securities,but it is not when the Fed buys securities.
D)when the Fed either buys or sells securities.
E)when the Fed raises the required reserve ratio.

Question

Quizplus · Accepted Answer

A currency drain is an increase in currency held outside banks, which means that people are holding onto more cash and not depositing it into banks. This can lead to a decrease in the money supply and a potential increase in interest rates.

A Currency Drain Is