6 acceptability acceptability means that everyone

6. ACCEPTABILITY
• Acceptability means that everyone must be able to use the money
for transactions.
• Money is universally accepted anywhere in the world as a
universal mean for transaction.
7. UNIFORMITY
• Able to count and measure money Accurately.

Motives of the Money Requirement
 Transaction Motives – Income, Business other activities
The transactions motive for demanding money arises from the fact that most transactions
involve an exchange of money. Because it is necessary to have money available for transactions,
money will be demanded.
 Precautionary Motives – Contingencies
People often demand money as a precaution against an uncertain future. The need to
have money available in such situations is referred to as the precautionary motive for
demanding money.
 Speculative Motives – Money Market
The speculative motive for demanding money arises in situations where holding money is
perceived to be less risky than the alternative of lending the money or investing it in some other
asset.

Near Monies
Near money , also known as quasi - money , refers to highly
liquid assets that can rapidly be converted into cash such
as short-term money market instruments and bank
deposits. ... Near money means non- cash assets
that are very liquid but cannot be used directly for
transactions.

Difference between Money & Near
Money
Unit of Account – money is a unit or account, it is a common
measure of value. Prices in shops, for example, are expressed
in terms of money. Near money has no such function. In fact,
near money’s own value is expressed in terms of money.
Making Transactions – we use money directly for making
transactions, while near money is an indirect medium of
exchange – we need to convert it into money first before it
can be used for transactions.
Liquidity – money is 100% liquid, near money is not.
Converting near-money involves time, and sometimes a fee
(exchanging currency, or paying a penalty for taking your
money out before the agreed date).

Types of Near Money
1.
Savings accounts.
2.
Money funds.
3.
Bank time deposits (certificates of deposit)
4.
Government treasury securities (such as T-bills)
5.
Bonds near their redemption date.
6.
Foreign currencies, especially widely traded ones such as
the US dollar, euro or yen.

Types of Near Money
1 Savings accounts.
 A savings account is a deposit account held at a retail
bank that pays interest but cannot be used directly
as money in the narrow sense of a medium of
exchange (for example, by writing a cheque). These
accounts let customers set aside a portion of their liquid
assets while earning a monetary return.

Types of Near Money
2 Money funds.
 A money market fund (also called a money market
mutual fund ) is an open-ended mutual fund that invests
in short-term debt securities such as Treasury bills. Money
market funds are widely (though not necessarily
accurately) regarded as being as safe as bank deposits
yet providing a higher yield.

Types of Near Money
3 Bank time deposits (certificates of deposit)
 A time deposit or term deposit (also known as
a certificate of deposit in the United States) is a deposit
with a specified period of maturity and earns interest. It is