The money and assets which can be easily and quickly transferred into money without loss in value are called near money.Near money cannot be directly used or making payments.There are first to converted into proper money as and when needed for spending.Near money or non monetary liquid assets chiefly consist of time deposit,treasury bills,government securities,saving bonds.
As near monies can be easily converted into currency or demand deposits.It has important bearing on the economic health of the economy.The increase or decrease in the holding of near money affects the rate of communities saving and spending.The greater amount of wealth in form of near monies,the greater is tendency of the community to consume out of income.Secondly,as the monies can be easily converted into cash.It directly effects the money supply.
As near monies can be easily converted into currency or demand deposits.It has important bearing on the economic health of the economy.The increase or decrease in the holding of near money affects the rate of communities saving and spending.The greater amount of wealth in form of near monies,the greater is tendency of the community to consume out of income.Secondly,as the monies can be easily converted into cash.It directly effects the money supply.