Question

Which best describes the economic impact of defaulting on bank loans?
The economy suffers because banks have less money to loan to others.
The economy suffers because people have less money to spend
The economy suffers because businesses are scared to take out loans
The economy suffers because people are scared to take out loans

Answer 1

Answer:

The first one

Explanation:

As they sometimes cannot repay the loans hence losing money.

Answer 2

The Economic Impact of defaulting on bank loans is that the Economy suffers because banks have less money to loan to others.

What is Defaulting on bank loans ?

Defaulting on bank loans means it is the failure of the borrower to pay the interest on the loan.

So in such cases if the people do not pay the Interest on the loans one final day the bank starts to run out of money and provide it to the people or provide more loans to the people.

For more information on Bank loans :

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