Money and Banking

Money and Banking

In earlier times people only accepted bank notes as money because they were convertible into gold. Nowadays everything have changed, money has become a commodity and its always accepted as that if it possesses some properties such as durability, portability, divisibility and if it is limited in supply.
Money Supply consists on bank deposits, bank notes and coins.
Bank deposits can be converted into cash because of two reasons: on demand or just after some period of notice. These bank deposits are created when notes and coin are paid into a bank and when a bank makes a loan.
Banks assets are mostly financial assets. The reason I s...