One Reason That "Near-Monies" Are Important Is Because

question 141

Multiple Choice

One reason that "near-monies" are important is because:

• A)they simplify the definition of money and therefore the formulation of monetary policy.
• B)they can be easily converted into money or vice versa, and thereby can influence the stability of the economy.
• C)they do not reflect the level of consumer spending but they have a critical impact on saving and investment in the economy.
• D)credit cards synchronize one's expenditures and income, thereby reducing the cash and chequeable deposits one must hold.

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Definitions:

Noncash Asset

Assets owned by a business not in the form of cash but may be converted into cash within a year, such as inventory and property.

Change in Cash

The difference in a company's cash balance over a specified period, indicating the net increase or decrease in cash.

Net Income

The total earnings of a company after all expenses and taxes have been subtracted from total revenue.

Related Party Transaction

Financial transactions between entities that are considered to have a special relationship, such as companies with common ownership.