Question

Data show that an average Canadian and American citizens hold CA $ 1500 and US 2000 of their currency respectively . Since money is bulky , it can be stolen , pays no interest and in general we do not see our fellow Canadians holding $ 1500 in where are these dollars and who is holding them ?

Answer 1

Citizens hold liquid cash in numbers of type not solely in currency. Infact in alternative forms cash will offer come back still. once we say associate Amercan has $2000 it doesn't neccessarily implies that this quantity is in currency (notes or coins) however may are keep in saving or deposit accounts. Such accounts area unit liquid that's the yankee will withdraw money from it whenever needed or will even created apyment through electronic suggests that. Keeping such cash in accountd conjointly offer returns in type of interest. the opposite forms that area unit less liquid embody treasury bills, fast bonds etc.

When voters deposit their owned cash in their saviing/deposit accounts then banks get authority thereto till it's withdrawn of citizen's creeed. Banks then build loans from such deposits when keeping a reserve from it to fulfill daiily client request of withdrawl. therefore it may be s aid that banks and monetary establishments typically hold such cash for the voters.