Question

Explain the concepts of:
(i) Currency and coins with public;
(ii) Demand deposits held by commercial banks.

Answer 1

(i) Currency and coins with public are the physical form of money which are issued by the central bank of country and it is commonly accepted as a form of legal tender by the whole country.

(ii) Demand deposits held by the commercial banks are the intangible form of money which the public deposit into the banks which can be withdrawn on demand at anytime and any place.