Using a credit card to make a purchase is most like which of the following?
A)Using cash for the purchase
B)Having money directly withdrawn from your account
C)Using a check to make the purchase
D)Getting a short term loan from the bank to make the purchase

Question

Quizplus · Accepted Answer

Using a credit card to make a purchase is most similar to getting a short term loan from the bank to make a purchase.
Key Takeaway: Remember that liquidity is the ease with which an asset, typically money, can be converted into spendable form. Credit cards are not considered to be a liquid asset and do not count as money that is within the money supply. Currency is considered to be extremely liquid, as it's the easiest form of money to convert into spendable form. Checks and money in savings is considered less liquid.

Using a Credit Card to Make a Purchase Is Most