An increase in the currency drain
A) decreases the monetary base.
B) increases the quantity of money.
C) increases bank reserves.
D) does not change the amount of the monetary base.
E) does not change the quantity of money.

Question

Quizplus · Accepted Answer

An increase in the currency drain does not change the monetary base because the monetary base includes both currency in circulation and reserves held by banks.

An Increase in the Currency Drain