With coalition building and bargaining, transactions costs are higher the larger number of people involved

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 2009 is counted in M1 and M2. D) No part of the $880 billion balance is counted in M1 and M2.

In Canada, when new demand deposits are created through loans made to Canadians who borrow in order to invest in Canada

a. the Canadian money supply contracts b. excess reserves in Canadian banks are destroyed c. the money supply in Canada remains unchanged but the interest rate decreases favoring the Canadian investor d. the money supply in Canada expands e. the Canadian legal reserve requirement declines