When Discussing the Banking System,a Cash Drain of 5% Means

question 96

Multiple Choice

When discussing the banking system,a cash drain of 5% means that

• A)5% of an initial new deposit to the banking system is paid in banking fees and is therefore not available for the creation of new deposit money.
• B)depositors wish to hold 5% of the value of their deposits in cash.
• C)5% of an initial new deposit to the banking system is payable as a financial services tax.
• D)95% of an initial new deposit is maintained as cash reserves by the commercial bank.
• E)depositors wish to hold 95% of the value of their deposits in cash.

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