Question

How does the use of credit influence businesses and the economy?

A) It leads to economic stability.
B) It has no impact on businesses and the economy.
C) It can stimulate economic growth or lead to debt.
D) It ensures banks and credit unions function properly.

Answer 1

The use of credit can stimulate economic growth or lead to debt.

Step-by-step explanation:

The use of credit can stimulate economic growth or lead to debt.

When banks and financial institutions are willing to lend and people and businesses are eager to borrow, it can lead to economic growth. The availability of credit can help businesses expand, invest in new projects, and create jobs.

However, if credit is misused or becomes too easy to obtain, it can lead to excessive debt. This can create financial instability and can have a negative impact on businesses and the economy, as seen in the 2008-2009 Great Recession.