Credit Card Balances Are Not Considered to Be Money Primarily

question 91

Multiple Choice

Credit card balances are not considered to be money primarily because they:

• A)are rarely used to make purchases.
• B)are not part of people's wealth.
• C)are an asset used in making transactions.
• D)do not represent an obligation to pay someone else.

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Definitions:

Circular Flow Diagram

A visual model of the economy that shows how dollars flow through markets among households and firms.

Households

Economic units that consist of all individuals who live together in one dwelling, making joint decisions about consumption and labor.

Circular Flow Model

An economic model illustrating the continuous movement of money, goods and services, and factors of production between producers and consumers in an economy.

Interdependence

Interdependence is a condition where entities are mutually reliant on each other, implying that actions of one can significantly impact the others.