indebtedness

Vocabulary Word

Definition

Indebtedness is a state of being in debt, or owing money. Think of it like having a running IOU to a bank, person, or other organization.

Examples in Different Contexts

In financial literacy programs, understanding 'indebtedness' is fundamental to promote responsible financial behavior. A financial educator might declare, 'Educating individuals about indebtedness is key to fostering financial responsibility and preventing detrimental economic outcomes.'

Practice Scenarios

Economics

Scenario:

The government has been resorting to bonds to finance its capital projects. This might be seen as an increased reliance on debt financing.

Response:

So, the government's indebtedness is likely to increase due to the extensive use of bonds for public projects.

Business

Scenario:

As you know, we're planning to open a new location next year, which will require a significant investment.

Response:

Considering this, we should have a clear repayment plan in place to manage our increased indebtedness effectively.