According to an article in the Wall Street Journal in mid-2019, “cash hasn’t completely disappeared yet—an attempt to pay with Venmo . . . will be met with a bemused shake of the head at plenty of corner bars, laundromats and food trucks.”

a. Does Venmo fulfill the role of a medium of exchange? Does it matter for your answer that many retail stores won’t accept it in payment for goods and services?

b. The Fed doesn’t count the balances in Venmo accounts in either its M1 or M2 measures of the money supply Briefly discuss whether the balances in Venmo accounts and the balances that people have with similar apps should be included in M1. Include in your answer whether the Fed could easily gather the needed data.