Author Question: Suppose you borrow 1,000 to purchase a car. Which of the following correctly represents the changes ... (Read 48 times)

nevelica · **on:** Jun 30, 2018

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

Question 2

Net taxes are:
a. taxes plus transfer payments.
b. taxes minus transfer payments.
c. an injection into the economic system.
d. consumption after taxes.
e. government spending minus taxes.