Question: Which Of The Following Is The Best Example Of A Near Money?

What are the 4 types of money?

In a Nutshell.

The four most relevant types of money are commodity money, fiat money, fiduciary money, and commercial bank money.

Commodity money relies on intrinsically valuable commodities that act as a medium of exchange.

Fiat money, on the other hand, gets its value from a government order..

Are checkable deposits really money?

Checkable deposits are money because their owners can write checks against them. Federal Reserve Notes are liabilities of the Federal Reserve. (Printed by the U.S. Bureau of Engraving and Printing.) They can only be exchanged for more currency, so they are fiat money.

Which of the following assets qualifies as money meaning m1?

M1 includes those assets that are the most liquid such as cash, checkable (demand) deposits, and traveler’s checks.

What form of money is most liquid?

CashCash is the most liquid form of money. Ideally, the fact that cash can easily be converted to assets is the reason behind its liquidity.

What is E money?

Electronic money (e-money) is broadly defined as an electronic store of monetary value on a technical device that may be widely used for making payments to entities other than the e-money issuer. The device acts as a prepaid bearer instrument which does not necessarily involve bank accounts in transactions.

What is meant by near money?

Near money is a financial economics term describing non-cash assets that are highly liquid and easily converted to cash. … Examples of near money assets include savings accounts, certificates of deposit (CDs), foreign currencies, money market accounts, marketable securities, and Treasury bills.

Which asset is near money quizlet?

“Near money” in M2 includes savings deposits, money market mutual funds and other time deposits, which are less liquid and not as suitable as exchange mediums but can be quickly converted into cash or checking deposits.

Is debit card near money?

It is important to note that in our definition of money, it is checkable deposits that are money, not the paper check or the debit card. Although you can make a purchase with a credit card, it is not considered money but rather a short term loan from the credit card company to you.

What is the best example of commodity money?

Commodity moneyCommodity money is money whose value comes from a commodity of which it is made. … Examples of commodities that have been used as media of exchange include gold, silver, copper, salt, peppercorns, tea, decorated belts, shells, alcohol, cigarettes, silk, candy, nails, cocoa beans, cowries and barley.More items…

What is US dollar backed by?

Fiat currency is legal tender whose value is backed by the government that issued it. The U.S. dollar is fiat money, as are the euro and many other major world currencies. This approach differs from money whose value is underpinned by some physical good such as gold or silver, called commodity money.

Which is narrow money?

Narrow money is a category of money supply that includes all physical money such as coins and currency, demand deposits and other liquid assets held by the central bank. In the United States, narrow money is classified as M1 (M0 + demand accounts). In the United Kingdom, M0 is referenced as narrow money.

Which of the following is an example of near money?

Examples of near money are as follows: … Money market funds. Bank time deposits (certificates of deposit) Government treasury securities (such as T-bills)

Which of the following would be an example of fiat money?

The continental currency issued during the American Revolution, the assignats issued during the French Revolution, the “greenbacks” of the American Civil War period, and the paper marks issued in Germany in the early 1920s are historical examples of fiat money.

Is gold near money?

That is why Land and buildings are not termed at money or near money. At the same times, assets such as Gold and silver are more liquid and sometimes called near money.

What is the term used to identify all liquid money and assets?

Liquidity refers to how easily an asset can be turned into cash. Money consists either of cash itself, which is liquid by definition, or of other assets that are highly liquid. actual cash in the hands of the public is considered money.

What is an example of representative money?

Representative money is an item such as a token or piece of paper that has no intrinsic value but can be exchanged on demand for a commodity that does have intrinsic value, such as gold, silver, copper, and even tobacco.

Which of the following is an example of near money quizlet?

Examples of near money are: Savings accounts. Money funds. Bank time deposits.

What is the difference between money and near money?

It can be important to make the distinction between money and near money in all near-money evaluations. Money involves cash in hand or cash in the bank, which can be accessed as a transactional exchange medium on demand for use. Near money needs some time to convert to cash.