Credit Cards Are Considered to Be "Money Substitutes" Instead of Money

question 65

Multiple Choice

Credit cards are considered to be "money substitutes" instead of money because

• A)they are not acceptable to pay for purchases.
• B)they cannot serve as a temporary medium of exchange.
• C)the only function of money they can perform is to serve as a store of value.
• D)money must eventually be used to pay for the transaction.
• E)credit card accounts are not chequable.

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Definitions:

MU ᵦ/P ᵦ Ratio

Represents the marginal utility of good B (MUᵦ) divided by its price (Pᵦ), used in consumer theory to analyze optimal consumption points.

TP or MP Curves

Total Product (TP) and Marginal Product (MP) curves are graphical representations in economics that illustrate the total output produced and the additional output from employing one more unit of a resource, respectively.

MR Curve

The marginal revenue curve, which shows how a firm's revenue changes with each additional unit sold.