Question

1. What is the difference between the fiat money and representative money?
2. What is bank deposit?
3. What does durability mean as a characteristic of money?
4. What is the difference between depository and non-depository financial institutions?
5. What types of accounts do commercial banks offer to their customers?

Answer 1

1. Representative money is the money that is backed by something of value i. e. maybe a commodity like Gold etc. so as that money indirectly represents tha that commodity its called "representative money". Fiat money is the money created out of thin air and not backed by anything except the diktat of the government wherein the government's ability & law to declare it as legal tender and collect taxes in it gives it the value
2. Bank Deposit is an amount of money in cash or check form or sent via a wire transfer that is placed into a bank account.
3. Durability means physical wear over time.
4. Most of the money and credit readily available to the economy comes from depository corporations i. e banks that accept deposits from public in the form of savings and mobilize the same by lending. Banks have two major functions 1) Accept deposit 2) Lend money However, as opposed to banks there are nondepository institutions, which are financial intermediaries that cannot accept deposits but do pool the payments in the form of premiums or contributions of many people and either invest it or provide credit to others.
5. Commercial banks offer their customers accounts of two types: demand deposits and time deposits.