An Increase in the Currency Drain Ratio

question 186

Multiple Choice

An increase in the currency drain ratio

• A)decreases the monetary base.
• B)increases the quantity of money.
• C)increases bank reserves.
• D)does not change the amount of the monetary base.
• E)does not change the quantity of money.

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Definitions:

Key Assumptions

Fundamental beliefs or principles that are accepted as true without proof, used as the basis for reasoning, discussion, or calculation.

Production Function

An equation that describes the relationship between inputs (like labor and capital) and the maximum output that can be produced with those inputs.

Returns to Scale

Describes how a firm's output changes as inputs are increased proportionately.

Decreasing

A process or trend of becoming smaller or less in amount, size, degree, or value.