Question

why are demand deposits called as money?​

Answer 1

Answer:

Demand deposits are considered as money for the following reasons :

(i) They can be withdrawn from the bank whenever it is so required.

 (ii) They are widely accepted as a means of payment, along with the currency, hence they are considered as money.

(iii) They are accepted widely as means of payment by way of a cheque instead of cash. Thus they are also considered as money in the modern economy.

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Answer 2

Answer:

Demand deposits are considered as money, because they can be withdrawn. When required and the money withdrawn can be used for making payments.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.