Question

What are demand deposits. How are they accepted as means of payment?

Answer 1

Demand deposits offer another interesting facility. It helps in making the payment in cheque.
A cheque is a paper instructing the bank to pay a specific amount from the person’s account to the other person or to the account holder.
Thus, we see that demand deposits share the essential features of money.
The facility of cheques against demand deposits makes settlement of payments possible without using cash.
Since demand deposits are accepted widely as a means of payment, along with currency, they
constitute money in the modern economy.

Answer 2

HEY BUDDY HERE IS UR ANSWER !!

Demand deposits are considered as money for the following reasons :

(i) They are widely accepted as ameans of payment, along with the currency, hence they are considered as money.

(ii) They are accepted widely as means of payment by way of a cheque instead of cash.


Demand deposits are considered as money, because they can be withdrawn when required and themoney withdrawn can be used for making payments.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

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