Explain how the currency drain ratio 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 ratio is 50 percent.

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The Answer of Explain how the currency drain ratio 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 ratio is 50 percent.

Explain How the Currency Drain Ratio Affects the Size of the Money