Q. Which among the following is a correct definition of currency drain?
Answer: A currency drain is an increase in currency held outside the banks
Notes: A currency drain refers to the increase in currency held outside of banks, often due to individuals or businesses hoarding cash instead of depositing it. This can reduce the money supply available for lending and economic activity. Historically, during economic crises, such as the Great Depression, currency drains occurred as people lost trust in banks and withdrew their funds.