In economic terms, what is debt?

Debt is defined as money that is owed to another party and must be repaid according to agreed terms. This means that when an individual, business, or government borrows money, they create an obligation to return that money, often with interest, within a specified timeframe. This arrangement is formalized through contracts that detail the repayment terms, interest rates, and other conditions associated with the borrowing.

In contrast, the other options provided do not accurately capture the essence of what debt means in economic terms. The total amount of assets owned by a party refers to wealth rather than debt, as debt represents liabilities rather than assets. Additionally, debt is not inherently a signal of financial success; rather, it can be a tool for managing finances, and excessive debt can indicate financial trouble. Lastly, investments are distinct from debt, as investments involve using capital with the expectation of earning a return, rather than owing money to others. Thus, the definition of debt specifically highlights its nature as a financial obligation rather than a measure of wealth or investment status.