Answer:
Checkable deposits are classified as money because:
they can be readily used in purchasing goods and paying debts.
Explanation:
Banks create money with customers deposits, depending on the reserve ratio mandated by the Federal Reserve. They are not expected to hold currency equal to the value of their checkable deposits, but equal to the reserve ratio. Reserve ratios enable banks to create money and increase the money supply above the paper currency.
Money is a means of exchange for goods and services. Checkable deposits are money deposited by bank customers which can be withdrawn at short notice. They can be used to pay for goods and services, and to settle debts.
