Question

4 multiple choice 1 point which of the following is not true for the envelope budget? most, if not all, discretionary spending is done with cash. using cash instead of a card naturally limits spending. if a person uses a credit or debit card, he will most likely spend less money than if he used cash. it utilizes the psychological advantages of paying with cash.

Explanation:

To determine the incorrect statement about envelope budgeting:

• Envelope budgeting typically uses cash for discretionary spending (so first option is true).
• Using cash limits spending as you can't spend beyond the cash you have (second option is true).
• Psychologically, paying with cash makes people more aware of spending, so envelope budgeting uses this (fourth option is true).
• Research and common knowledge show that using cards (credit/debit) often leads to more spending (due to less psychological impact of parting with cash), so the statement "If a person uses a credit or debit card, he will most likely spend less money than if he used cash" is false.

Answer:

C. If a person uses a credit or debit card, he will most likely spend less money than if he used cash