Which of the following is referred to as ‘Near Money’?
Show answer & explanation
Correct answer: C
Explanation
The correct answer is option 3 i.e. National savings deposits .
National Savings Deposits are often referred to as ‘Near Money’, a term used in economics to describe financial assets that are not cash but can be quickly converted into cash with minimal loss of value. Near money includes instruments like savings deposits, Treasury bills, and fixed deposits. These assets are highly liquid, interest-bearing, and relatively safe, making them useful for short-term financial planning. National Savings Deposits, maintained by individuals with post offices or banks, are a prime example. Though not legal tender like cash, they are close substitutes, hence the term ‘near money’ due to their liquidity and stability.