Some nonmonetary assets are called near money because they:
A)are controlled by the Federal Reserve.
B)earn about the same interest rate as money.
C)have nearly the same liquidity as money.
D)generate the same velocity as money.

Question

Quizplus · Accepted Answer

Near money refers to nonmonetary assets that can be easily converted into cash, such as government securities, certificates of deposit, and commercial papers. While these assets may not be as easily exchangeable for goods and services as cash, they have nearly the same liquidity as cash and can be quickly converted into cash when needed. They may not earn the same interest rate as money, and they are not controlled by the Federal Reserve. The velocity of near money may or may not be the same as money, depending on various factors.

Some Nonmonetary Assets Are Called near Money Because They