Q.What is near money? Give two examples.

Not every liquid financial asset can directly settle a purchase, even if it is easily converted into cash.

Near money (quasi-money) refers to financial assets that are NOT money themselves — they cannot be handed over directly to settle a transaction — but that can be converted into money quickly and with little loss of value. Two common examples are (i) fixed deposits with banks, which must first be withdrawn or encashed before the funds can be spent, and (ii) government bonds, which must be sold or redeemed before their value becomes spendable money. Post-office savings certificates and bills of exchange are other common examples. All of them differ from money in requiring this extra conversion step, even tho …

Calling near-money assets 'money' outright, simply because they are liquid — the defining feature of near-money is precisely that it is NOT …