Currency and demand deposits are money because:
A)they are backed by a precious metal.
B)the government asserts that they are.
C)they are "resting" in a chartered bank vault.
D)they can be redeemed for an intrinsically valuable commodity such as gold.

Question

Quizplus · Accepted Answer

Currency and demand deposits are considered money because the government determines and recognizes them as legal tender for settling debts and making purchases. They are not backed by a precious metal or redeemable for a commodity such as gold.

Currency and Demand Deposits Are Money Because