What is near money?

What Is Near Money? Near money, sometimes referred to as quasi-money or cash equivalents, is a financial economics term describing non-cash assets that are highly liquid and easily converted to cash.

What is money medium of exchange?

A medium of exchange is an intermediary instrument or system used to facilitate the sale, purchase, or trade of goods between parties. For a system to function as a medium of exchange, it must represent a standard of value. … In modern economies, the medium of exchange is currency.

What is the difference between money and near money?

(i) Money consists of coins currency notes and demand deposits of the bank. … (v) Money is directly used for making the transactions. (v) On the other hand, near money is an indirect medium of exchange, it has to be first convert into ready money and then it used for transactions.

Is check near money?

This means that currency which we hold is cent percent liquid. In the same way, the demand deposits such as cheques, demand drafts etc. can be encashed immediately and so they are also liquid assets. … These are highly liquid assets that can easily be converted into cash.

What is not a medium of exchange?

(because they are a medium of exchange), and why checks, money orders, or debit and credit cards are not money (because they are only a means of payment but not a medium of exchange). … By defini- tion, currency and demand deposits are money, while checks, credit and debit cards are not.

What is an example of medium of exchange?

The best example of a medium of exchange is currency and the whole purpose of it is to facilitate trading activities. By providing an element that has a known and collectively-agreed value of exchange the medium of exchange becomes a generally accepted way to settle economic transactions.

Is savings Bond near money?

Examples of near money include: Savings accounts. … Government treasury securities (such as T-bills) Bonds near their redemption date.

Is a debit card near money?

A debit card, like a check, is an instruction to the user’s bank to transfer money directly and immediately from your bank account to the seller. Thus, a debit card is every bit as much money as a check.

Is DD near money?

Demand draft or DD is a method used by an individual or a bank to transfer money from one bank account to another. This person or party who receives the demand draft is called payee. … The money through this demand draft can only be transferred to the payee and no other person can receive this DD.

Which among Following is near money?

T-bills, Equity shares of a company, Bill of exchange and Debentures are all considered as near money.

Are stocks considered near money?

Near money is not a medium of exchange, but it has a store of value. Other examples of near money include savings accounts, money market accounts, widely traded foreign currency, and treasury bills. … However, most economists would not consider corporate stock near money because a share of stock may not retain its value.

Is paper note a near money?

Cash like paper notes and coins are not near money.