# Cash Accounts ## Definition Credit arrangements where banks allow merchants to borrow money up to a certain limit, repaying and re-borrowing as needed. This system provides merchants with access to capital without maintaining large cash reserves. ## Source Chapter Book II, Chapter 2 ## Context Smith describes cash accounts as a Scottish banking innovation that allows merchants to operate with less idle capital. He explains how this system increases the efficiency of capital use and enables merchants to carry on larger trades. ## Economic Domain Exchange ---