Credit cards were introduced in 1959. In 2014, the U.S. credit card balance was $880 billion. Which of the following is TRUE?
A) The $880 billion balance is part of M2 but not part of M1.
B) The $880 billion balance is part of both M1 and M2.
C) Only that portion of the $800 billion actually charged in 2014 is counted in M1 and M2.
D) No part of the $880 billion balance is counted in M1 and M2.

Question

Quizplus · Accepted Answer

Credit card balances are not considered part of the money supply (M1 or M2) because they represent credit, not actual money.

Credit Cards Were Introduced in 1959