Why Are Demand Deposits (Chequing Accounts)classified as Money

question 126

Multiple Choice

Why are demand deposits (chequing accounts) classified as money?

• A)Because they can be readily used in making purchases and for the payment of debts.
• B)Because they earn interest income for the depositor.
• C)Because they are ultimately the obligations of the government.
• D)Because banks hold currency equal to the value of their outstanding deposits.
• E)Because they are insured by the Canadian Deposit Insurance Company.

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