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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Definitions:

Muscle

Tissue in the body composed of fibers capable of contracting to produce movement or maintain the posture of the body.

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An inflammation of the protective membranes covering the brain and spinal cord, potentially caused by infection (viral, bacterial, or fungal).

Spinal Cord

The long, thin, tubular structure composed of nervous tissue that extends from the brainstem down the back, enabling communication between the brain and the body.

Bacterial Infection

An ailment caused by harmful bacteria entering the body, leading to symptoms such as fever, inflammation, and in some cases, serious illness.