Chapter 10, Problem 7AA

To determine

Correct word to complete the sentence.

Answer to Problem 7AA

The correct word to complete the sentence is undergo.

Explanation of Solution

Before lending money, the lender conducts a credit check of the business. This is important for the lender as well as the borrower.

A credit check helps the lender in determining the ability of the borrower to pay off the debt in time. It checks the financial stability of the borrower. During the credit check, if lender comes across an opinion that the borrower will not be able to pay the debt, he may refuse to lend the money.

Economics Concept Introduction

Introduction: Credit check is an important aspect to be considered by the lender before lending the money.