Suppose you borrow $1,000 to purchase a car. Which of the following correctly represents the changes in your personal balance sheet after the bank lends the money, but before you spend it?
a. Assets: loan, +$1,000 . Liabilities and net worth: checking deposit, +$1,000
b. Assets: loan, -$1,000 . checking deposit, +$1,000 . Liabilities and net worth: no change
c. Assets: loan, +$1,000 . checking deposit, -$1,000 . Liabilities and net worth: no change
d. Assets: checking deposit, +$1,000 . Liabilities and net worth: loan, +$1,000
e. Assets: checking deposit, +$1,000 . Liabilities and net worth: loan, -$1,000
d
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John has a math test tomorrow. He has decided to go to the gym today and then study math for several hours. Which of the following statements is TRUE?
A) John did not use the economic way of thinking because his decision on how to allocate his time did not involve money. B) John's decision on how to allocate his time is inconsistent with the rationality assumption since he has decided to go to the gym. C) John's decision on how to allocate his time is consistent with the rationality assumption since the decision is intended to make him better off. D) John's decision does not involve his pursuit of self-interest.
For which product is the income elasticity of demand most likely to be positive?
A. Cabbage B. Retreaded tires C. Computers D. Used clothing