Question

how demand deposits act as money ? ​

Answer 1

Explanation:

Demand deposits, or non confidential money are funds held in demand accounts in commercial banks. These account balances are usually considered money and form the greater part of the narrowly defined money supply of a country. Simply put, these would be funds like those held in a checking account.

Answer 2

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Demand deposits are considered as money, because they can be withdrawn when required and the money withdrawn can be used for making payments. So, they are also considered as money in the modern economy.

Read more:-

A demand deposit is an account with a bank or other financial institution that allows the depositor to withdraw his or her funds from the account without warning or with less than seven days' notice. Demand deposits are a key component of the M1 money supply calculated by the Federal Reserve.

A demand deposit account (DDA) consists of funds held in a bank account from which deposited funds can be withdrawn at any time, such as checking accounts. ... A DDA allows funds to be accessed anytime, while a term deposit account restricts access for a predetermined time.

advantages of demand deposits

A demand deposit account is a bank account where you can withdraw any time you want, without paying any additional charges for it. The advantages of demand deposits are: Flexibility of Withdrawals: As the name suggests, you can 'demand' money for withdrawal any time you want, so you have liquidity of funds.

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