Sue uses a credit card to purchase a new pair of jeans. Sue is:
A) using money to buy her jeans since credit cards is money.
B) creating a liability that she will ultimately have to pay with money.
C) using an electronic payment form of money.
D) using a form of money included in M2.

Question

Quizplus · Accepted Answer

By using a credit card, Sue is essentially borrowing money from the credit card company to make the purchase. This creates a liability (debt) that Sue will have to repay later with actual money. Therefore, B is the correct answer.

Sue Uses a Credit Card to Purchase a New Pair