Every year more and more purchases are made with credit cards on the Internet. Given this trend, all else equal, we would expect:
A) the money demand curve to shift outward.
B) the money demand curve to shift inward.
C) a downward movement along a fixed money demand curve.
D) an upward movement along a fixed money demand curve.

Question

Quizplus · Accepted Answer

As more purchases are made with credit cards, the need for holding physical money decreases, leading to a shift inward in the money demand curve.

Every Year More and More Purchases Are Made with Credit