Understanding Money, Risk, and Collateral in the Economy
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10: Why were demand deposits considered as money?
Answer: Since demand deposits are accepted widely as a means of payment along with currency, they are also considered as money in the modern economy.
11: What would happen if all the depositors went to ask for their money at the same time?
Bank would not be able to give money to the depositors if they all went to ask for their money all at the same time. This is because, banks keep only about 15% and would have already used the balance portion of their deposits to extend loans.
12: What were the reasons that make Swapna’s situations so risky? Discuss factors: pesticides, role of money lenders, climate.
Pest attack, exploitation by money lenders, and lack of monsoon are the reasons that make Swapna’s... Continue reading "Understanding Money, Risk, and Collateral in the Economy" »