Credit Cards and Debit Cards in the Monetary System
6 Questions
0 Views

Choose a study mode

Play Quiz
Study Flashcards
Spaced Repetition
Chat to lesson

Podcast

Play an AI-generated podcast conversation about this lesson

Questions and Answers

What is the primary distinction between credit cards and debit cards in relation to 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)

    • When using a credit card, which of the following best describes the flow of funds?

  • 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.

    • If you were to write a check to pay your credit card bill, what component of the monetary system would the check be drawn from?

  • 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)

    • How are debit card transactions treated in the measurement of the quantity of money?

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

    Why are credit cards not considered a form of money in the monetary system?

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

    If a consumer uses a debit card to make a purchase, what happens to the money supply?

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

    More Like This

    Mastering Card-Based Electronic Payment Systems
    9 questions

    Mastering Card-Based Electronic Payment Systems

    PrestigiousLake avatar
    PrestigiousLake
    Credit Cards and Debit Cards in the Monetary System
    6 questions

    Credit Cards and Debit Cards in the Monetary System

    RedeemingArlington avatar
    RedeemingArlington
    Payment Systems Overview
    16 questions

    Payment Systems Overview

    BullishPyramidsOfGiza avatar
    BullishPyramidsOfGiza
    Credit vs Debit Cards
    13 questions

    Credit vs Debit Cards

    DauntlessHafnium553 avatar
    DauntlessHafnium553
    Use Quizgecko on...
    Browser
    Open
    Browser
    Browser