Which of the Following Constitutes a Currency Drain from the Banking

question 101

Multiple Choice

Which of the following constitutes a currency drain from the banking system?

• A) Purchase of government securities
• B) New demand deposits
• C) Banks lending out all excess reserves
• D) A banking panic that leads to large withdrawals from banks
• E) Lower required reserve holdings

---

Definitions:

Perfect Competitor

A theoretical market structure where numerous small firms compete against each other with no single company controlling the market price.

Long Run

A period in economics sufficient for all markets to adjust, including production, labor, and capital.

Marginal Revenue

The additional income received from selling one more unit of a product.

Output

The total amount of goods and services produced by an economic system over a specific period.