Answered

Consider what counts as money. A typical definition of money is: "a widely accepted means of payment." Place each of the given scenarios in the appropriate category based on whether each represents a real use of money.

Money

- Vaughn buys Cheetos from the school cafeteria using $1.50 cash.
- When Manuel gets home, he tells his mother how much he enjoyed the Fritos. The next time she goes to the grocery store, she purchases a large bag of Fritos with her debit card.

Not Money

- Vaughn trades his Cheetos to Atlee for her Fritos.
- Atlee sells her Fritos to Manuel in exchange for Manuel completing her homework the next two nights.



Answer :

GinnyAnswer

Final answer:

Student cards used for purchases count as part of the money supply as they serve as a widely accepted means of payment.


Explanation:

M1 includes currency in circulation, demand deposits, and traveler's checks. M2 encompasses M1 plus savings deposits, time deposits, and money market funds.

Regarding the student cards, these cards would be considered as part of the money supply since they hold funds that can be used as a medium of exchange, fitting the definition of money as a means of payment.

Therefore, the student cards would be categorized as part of the money supply since they represent a widely accepted means of payment.


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