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** This lesson is generated with AI assistance and approved by Danny Nelson. This lesson will communicate the essence of the topic for now until Danny can create a full lesson. **
Debt is an obligation that arises when one party borrows money or resources from another, typically requiring repayment with interest over a specified period.
It can take various forms, such as loans, bonds, mortgages, or credit card balances, and is used by individuals, businesses, and governments to finance purchases or operations.
Debt allows for immediate access to funds but carries risks like interest accumulation and potential default if repayments are not met.
Creditors assess borrowers' creditworthiness through factors like credit scores and income to determine lending terms.
Managing debt effectively involves balancing borrowing with repayment capacity to avoid financial distress.