Question

If Alex deposits $1,000 from her paycheck into her checking account and, at the same time, increases her credit card balance by $1,500, then her saving is ______, and her wealth ______.A) -$500; decreases by $500B) +$1,000; decreases by $500C) +$500; decreases by $1,000D) -$500; increases by $2,500

Answer 1

Answer:

option (A) -$500; decreases by $500

Explanation:

Data provided in the question:

Amount deposited = $1,000

Increase in credit card balance = $1,500

Now,

Deposit adds to assets whereas increase in credit card balances adds to liabilities

Therefore,

Savings = Deposits - Increase in credit card balances

= $1,000 - $1,500

= - $500

Here,

negative sign depicts the decrease in wealth

Hence,

The correct answer is option (A) -$500; decreases by $500