Question

Why are demand deposits considered 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(i) They can be withdrawn from the bank whenever it is so required.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

Explanation:

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