[amp_mcq option1=”Currency” option2=”Currency and demand deposits” option3=”Currency and bank deposits” option4=”All liquid assets” correct=”option2″]
The correct answer is: B. Currency and demand deposits
Currency is money in physical form, such as coins and banknotes. Demand deposits are checking accounts that can be easily converted into cash.
Option A is incorrect because it does not include demand deposits. Option C is incorrect because it does not include currency. Option D is incorrect because it includes all liquid assets, not just money in the normal sense.
Money in the normal sense is a medium of exchange, a unit of account, and a store of value. Currency and demand deposits are all of these things. They are used to buy goods and services, to measure the value of goods and services, and to store wealth.
Other types of liquid assets, such as savings accounts and money market funds, are not considered money in the normal sense because they are not as easily converted into cash.