Checkable deposits are money because
A)they are protected by the Federal Reserve.
B)they are guaranteed by banks.
C)checks bounce when there are not enough funds to cash them.
D)they can be converted into currency on demand and are used directly as a means of payment.
E)only banks and other financial institutions can offer them.

Question

Quizplus · Accepted Answer

Checkable deposits can be converted into currency on demand and are used directly as a means of payment, making them a form of money. The other choices are not necessarily true - checkable deposits are not protected by the Federal Reserve or guaranteed by banks, and checks bouncing is a consequence of insufficient funds, not a feature that makes them money. Additionally, non-bank entities can also offer checkable deposits, so choice E is incorrect.

Checkable Deposits Are Money Because