Question

How does increasing your credit card balance affect your net worth statement?(1 point)
Responses

It decreases your debt, and so raises your total net worth.
It decreases your debt, and so raises your total net worth. - no response given

It decreases your debt, and so lowers your total net worth.
It decreases your debt, and so lowers your total net worth. - incorrect

It increases your debt, and so raises your total net worth.
It increases your debt, and so raises your total net worth. - no response given

It increases your debt, and so lowers your total net worth.

Answer 1

It increases your debt, and so lowers your total net worth.

Reason: net worth = assets − liabilities, so raising a liability (credit card balance) reduces net worth.