Credit cards are:i. a generally accepted form of payment and therefore part of M1.ii. are included in M1 because you write a check to pay your monthly bill.iii. a means of borrowing money.

BANKING GENERAL KNOWLEDGE

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Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]

A	i only
B	i and iii
C	ii only
D	i and ii
E	iii only

Explanation:

Detailed explanation-1: -Answer and Explanation: The answer is d) Credit card balances. In macroeconomics, as measures of amount of money flowing in an economy, M1 and M2 include currency, deposits, and some other categories.

Detailed explanation-2: -MO is included in both M1 and M2. MO is the total amount of paper money and coins in circulation, plus the current amount of central bank reserves.

Detailed explanation-3: -What would we expect to happen to M1 and M2 if depositors move their funds from time to checkable deposits? M1 would go up and M2 would stay the same. The Quantity Theory of Money would argue that which of the following is generally responsible for decreases in prices (i.e., deflation)?

There is 1 question to complete.