Question

what is bank money Why are demand deposits considered as money?

Answer 1

Deposits in a bank which are payable on demand are called demand deposits. They are considered as money because of the following factors.
i) They can be used as a medium of exchange
ii) They are easily acceptable
iii) They help in settling payment without the use of cash

Answer 2

Explanation:

Demand deposits considered as money due to the following reasons.

(i) These can be withdrawn from the bank whenever it is required.

(ii) They are widely accepted as a means of payment, along with the currency or a cheque instead of cash.