Are credit cards M1 or M2
Rather than trying to state a single way of measuring money, economists offer broader definitions of money based on the concept of liquidity. If your answer is about “credit cards,” then you are really talking about spending M1—although it is M1 from the account of the credit card company, which you will repay later when you credit card bill comes due.
Neither in M1 or M2 That is part of M1, and because M2 includes M1 it is also part of M2 Since credit cards do not fall under M1, M2 or M3 they are not considered to be part of the money supply. The money part of the transaction between you and the credit card company only comes into play when you pay your bill. Board of governors b. I do not have the $50 so I get my girlfriend to pay for the game on my behalf with the promise that I'll pay her back at some later date. Rather than trying to state a single way of measuring money, economists offer broader definitions of money based on the concept of liquidity. Credit card limits are included in a. M1 but not M2 b. M2 but not M1 c. M1 and M2 d. Neither M1 nor M2. Sometimes elements of M1 are not treated alike; for example, some businesses will not accept personal checks for large amounts, but will accept traveler’s checks or cash.
Table 1 gives a breakdown of the portion of each type of money that comprised M1 and M2 in February 2015, as provided by the Federal Reserve Bank.The lines separating M1 and M2 can become a little blurry. d. neither M1 nor M2.
We defined money as anything that is generally accepted as a means of payment, is a store of value, can be used as a unit of account or a standard of deferred payment. As with many other economic terms and statistics, the important point is to know the strengths and limitations of the various definitions of money, not to believe that such definitions are as clear-cut to economists as, say, the definition of nitrogen is to chemists.Where does “plastic money” like debit cards, credit cards, and smart money fit into this picture? savings accounts, mutual funds, small time deposits, and credit cards.
New York Federal Reserve Bank c. the FOMC d. none of … Are they money, too? We defined money as anything that is generally accepted as a means of payment, is a store of value, can be used as a unit of account or a standard of deferred payment. He teaches at the Richard Ivey School of Business and serves as a research fellow at the Lawrence National Centre for Policy and Management.
Which of the following executes open-market operations?
M3 includes M2 plus large-denomination ($100,000 or more) time deposits, balances in institutional money funds, repurchase liabilities issued by depository institutions, and Eurodollars held by U.S. residents at foreign branches of U.S. banks and at all banks in the United Kingdom and Canada.
These are the amounts held in checking accounts.
Professor of Business, Economics, and Public PolicyHow Much Is the Per Capita Money Supply in the U.S.? The $50 I will pay my girlfriend tomorrow is money, but the obligation I hold between today and tomorrow is not money.Credit cards work in the exact same manner as this loan.
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