Are Outstanding Credit Card Balances Counted as Part of the Money

question 105

Multiple Choice

Are outstanding credit card balances counted as part of the money supply?

• A)Yes;they are used to purchase things,and therefore,they are included in the money supply figures.
• B)No;money is an asset,while the credit card balances are a liability.Thus,they are not included in the money supply figures.
• C)Partly;credit card balances of $100 or less are included in the M1 money supply,but the money supply figures do not include balances in excess of $100.
• D)Partly;credit card balances are included in the M1 money supply,but not the M2 money supply.

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Definitions:

Parent-Company Extension Method

This method involves the accounting for investments in subsidiaries from the perspective of the parent company, focusing on the extension of the parent company's financial statements to include its interest in subsidiaries.

Entity Method

An approach in accounting that records the investments of a parent company in a subsidiary as distinct separate entities.

Consolidated Net Income

The total net income of a parent company and its subsidiaries after eliminating inter-company transactions.

Non-Controlling Interest

This refers to the portion of equity in a subsidiary not owned by the parent company, representing minority shareholders' rights in the subsidiary's net assets.