Final answer:
Credit cards are important for analyzing the monetary system but are not a medium of exchange or counted in M1 or M2 money supply because they do not represent money but the ability to borrow.
Step-by-step explanation:
Regarding credit cards and their role in the monetary system, the correct answer is c. important for analyzing the monetary system. Credit cards are not a medium of exchange; instead, they are a way to defer payment by borrowing funds from the credit card issuer.
While they are pivotal in analyzing the monetary system since they affect consumption and lending, credit cards are not counted in M1 or M2 money supply as they do not represent stored value but rather potential to borrow.
In its non-physical form, a credit card represents a payment mechanism which facilitates both consumer and commercial business transactions, including purchases and cash advances. A credit card generally operates as a substitute for cash or a check and most often provides an unsecured revolving line of credit.
Credit money is the creation of monetary value through the establishment of future claims, obligations, or debts. These claims or debts can be transferred to other parties in exchange for the value embodied in these claims. Fractional reserve banking is a common way that credit money is introduced in modern economies.