Name the modern form of money and explain its features
Answers
These are the modern forms of money and its features:
• Currency - Consists of paper notes and coins. Modern currency is not made of precious metals such as gold, silver and copper nor consists of daily use commodities. It is without any use of its own. It is accepted as a medium of exchange because the currency is authorized by the Govt. of the country.
• Deposits with banks - At a point of time people need only some currency for their day to day needs. The extra money is deposited with the bank by opening an account. The banks pays interest on the deposits. As the deposits in the bank account can be withdrawn on demand, they are called demand deposits. These deposits can be used as a medium of exchange. Hence bank money (cheques, drafts etc.) is not only a very convenient form of money for large payments but also eliminates risks and is durable.
Answer:
Explanation:
These are the modern forms of money and its features:
• Currency - Consists of paper notes and coins. Modern currency is not made of precious metals such as gold, silver and copper nor consists of daily use commodities. It is without any use of its own. It is accepted as a medium of exchange because the currency is authorized by the Govt. of the country.
• Deposits with banks - At a point of time people need only some currency for their day to day needs. The extra money is deposited with the bank by opening an account. The banks pays interest on the deposits. As the deposits in the bank account can be withdrawn on demand, they are called demand deposits. These deposits can be used as a medium of exchange. Hence bank money (cheques, drafts etc.) is not only a very convenient form of money for large payments but also eliminates risks and is durable.