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It's Your Birthday, and Your Uncle Opens Up His Wallet

Question 438

Essay

It's your birthday, and your uncle opens up his wallet and gives you a $20 gift card to the local movie theater. You take the $20 gift card and use it to watch a movie and buy some popcorn and soda. What is the effect of this transaction on M1 or M2? Explain.

Correct Answer:

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Gift cards are not money because they ca...

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