Explain how a currency drain affects the size of the money multiplier.In your explanation, suppose that in one round of the money creation process a bank gains $1 million in new deposits and reserves.Further suppose that the desired reserve ratio is 10 percent and the currency drain is 50 percent.

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The Answer of Explain how a currency drain affects the size of the money multiplier.In your explanation, suppose that in one round of the money creation process a bank gains $1 million in new deposits and reserves.Further suppose that the desired reserve ratio is 10 percent and the currency drain is 50 percent.

Explain How a Currency Drain Affects the Size of the Money