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Banks and Their Functions

Why are deman...

Question

Why are demand deposit considered as money?

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Solution

Demand deposits are regarded as money because such deposits can be used in the form of currency, cash or electronic transfer as a medium of exchange.

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Q. Demand deposits are considered to be money because of this feature:

Q. Consider the following components of money supply in India:
1. Currency in circulation
2. Banker's deposits with the NBI
3. Other deposits with the RBI
4. Demand deposits of banks
Which of the above are the components of Reserve Money?

Q. Why do demand deposits, along with currency, constitute money in the modem economy?

Q. Consider the following statements
1. Broad money refers to money with highest liquidity
2. Narrow money refers to currency held by public and demand deposits in banks

Which of the above is / are correct?

Q.  Consider the following statements

1. Broad money refers to money with highest liquidity
2. Narrow money refers to currency held by public and demand deposits in banks

Which of the above is / are correct?

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