Traditional Culture Encyclopedia - Traditional customs - What exactly does leverage mean in economics? Can you explain it in a popular way?

What exactly does leverage mean in economics? Can you explain it in a popular way?

Leverage, adding borrowed money to existing funds for investment; Leverage ratio, the ratio of assets to bank capital. Rational use of leverage principle is helpful for enterprises and individuals to accelerate their development and improve their efficiency, but there is also the risk that they will not be able to repay when due. Leverage is debt, and leverage ratio is debt ratio.

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