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:

Auditory Tubes

Also known as Eustachian tubes, these are channels leading from the middle ear to the pharynx, helping equalize pressure on both sides of the eardrum.

Stylomastoid Foramen

An opening located between the mastoid and styloid processes of the temporal bone, through which the facial nerve exits the skull.

Supra-Orbital Foramen

A hole or notch located above the orbit (eye socket) on the frontal bone, through which nerves and blood vessels pass.

Foramen Lacerum

A triangular opening located at the base of the skull, filled with cartilage, through which certain arteries and nerves pass.