What term describes the asset a borrower provides to a lender to ensure the repayment of a loan?

Multiple choice question for Basic of Economics. Select an option, then review the explanation below.

Explanation

When a borrower offers an asset to secure a loan repayment, this asset is known as collateral. Unlike a pledge or surety, collateral specifically refers to property or assets used as security for the loan.

Practice related questions from the same subject.

1.Which of the following best describes deflation?
2.Under what condition can two nations benefit from engaging in international trade?
3.Which of the following represents a legitimate form of currency?
4.Which political ideology is best summarized by the phrase, "From each according to his ability, to each according to his needs"?
5.Which type of currency experiences a decline in its exchange rate due to a continuous balance of payments deficit?

What term describes the asset a borrower provides to a lender to ensure the repayment of a loan?

Explanation

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