Money and Credit

Money is known as a medium of exchange, it is vital in today's world.
When both parties agree to sell and buy each others commodities it is known as double coincidence of want.
Credit is the activity of borrowing and lending money between two parties
Reserve bank of India is the national bank that oversees the formal sector.
Deposits in the bank account which are made on demand are known as demand deposits
The reserve bank of India issues currency, no other company is allowed to issue currency

Modern Currency is accepted because the government has issued it

Advantages of demand deposit

People with surplus money deposit their money in accounts of the bank.
The bank pays them an amount of interest rate, so the money will gradually increase
People have provision to widdraw thier money whenever they want to

What is cheque?

A cheque is a piece of paper instructing the bank to pay the money from the persons account to the person the check has been issued to

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