A currency drain is cash ________ and has ________ effect on the money multiplier.
A)draining into the banks;no
B)draining into the banks;an
C)held outside the banks;an
D)held at the Fed;an
E)held as reserves;no

Question

Quizplus · Accepted Answer

A currency drain refers to cash being held outside the banks, which reduces the amount of currency that is available for banks to lend out. This has an "an" effect on the money multiplier because it reduces the amount of money that can be created through the lending process.

A Currency Drain Is Cash ________ and Has ________ Effect

A Currency Drain Is Cash and Has Effect