Which of the following best explains the term 'demand deposits'?

Deposits that can be withdrawn without prior notice.

Investments that yield high returns.

Funds that require a contract for withdrawal.

Long-term savings held for retirement.

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Answer and Solution

A. Deposits that can be withdrawn without prior notice.

Demand deposits are funds held in an account that can be withdrawn at any time without prior notice, typically found in checking accounts.

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