Credit Cards and Debit Cards in the Monetary System

Credit cards represent a form of money, while debit cards do not.

Credit cards are included in measures of the quantity of money, but debit cards are not.

Debit cards are a method of payment, while credit cards are a method of borrowing.

Debit cards allow immediate access to funds, while credit cards defer payment. (correct)

The transaction is recorded as a loan from the bank to you.

The merchant receives payment directly from your credit card balance.

The bank pays the merchant on your behalf, and you repay the bank later. (correct)

The bank transfers funds from your account to the merchant's account.

The outstanding credit card debt.

The credit card balance itself.

The bank's reserves held at the central bank.

The balance in your checking account. (correct)

<p>They are included, as debit cards represent immediate access to bank deposits.</p> Signup and view all the answers

<p>Credit cards represent a form of borrowing, not a medium of exchange.</p> Signup and view all the answers

<p>The money supply remains unchanged, as the funds are simply transferred.</p> Signup and view all the answers