Suppose You Borrow $1,000 to Purchase a Car

question 20

Multiple Choice

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

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Definitions:

New Mexico's Commerce

Economic activities and trade occurring within New Mexico, often highlighting its unique position in the southwestern United States and its trade links.

Independence, Missouri

A city known for its historical significance, especially as the starting point of the Oregon, California, and Santa Fe trails, and the hometown of President Harry S. Truman.

Wagon Trains

Convoys or groups of wagons traveling together, typically used for migration and transportation of goods across long distances in the 19th century American West.

Emigrants

Individuals who leave their country of origin to live permanently in another country, often in search of better living conditions or to escape conflicts.