1. **State the problem:** Caroline's gross earnings are 1126 for the current pay period. We need to find the state disability insurance (SDI) amount deducted, which is 1% of her gross earnings. 2. **Formula:** The SDI deduction is calculated as: $$\text{SDI} = \text{Gross Earnings} \times \text{SDI Rate}$$ 3. **Apply the values:** $$\text{SDI} = 1126 \times 0.01$$ 4. **Calculate:** $$\text{SDI} = 11.26$$ 5. **Interpretation:** The SDI amount deducted from Caroline's paycheck is 11.26. 6. **Check options:** The correct answer is $11.26.