Sometimes,a Creditor Refuses to Extend Credit to a Debtor Unless

question 107

True/False

Sometimes,a creditor refuses to extend credit to a debtor unless a third party agrees to become liable on the debt.The third person's credit becomes the security for the credit extended to the debtor.This relationship may be either a surety arrangement or a guaranty arrangement.

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Definitions:

Gross Investment

The total amount of investment spent on new fixed investment plus replacement investment, without accounting for depreciation.

Net Investment

The total amount invested in buying new capital and replacing depreciated capital within a specific period.

Potential Output

The highest level of real GDP that can be sustained over the long term without increasing inflation, reflecting the maximum productive capacity of an economy.

Labor Force

The total number of people who are employed and unemployed but seeking work within an economy.