Final answer:
True. People can convert checkable deposits into paper money and coins on demand. This ability to convert checkable deposits into paper money and coins provides liquidity and flexibility in the use of money.
Step-by-step explanation:
True. People can convert checkable deposits into paper money and coins on demand. Checkable deposits are amounts held in checking accounts, and they are called demand deposits because the banking institution must give the deposit holder their money 'on demand' when a check is written or a debit card is used. This ability to convert checkable deposits into paper money and coins provides liquidity and flexibility in the use of money.