Answer:   Organization-Wide Defaults, or OWDs, are the baseline security you for your Salesforce instance. Organizational Wide Defaults are used to restrict access. You grant access through other means we will talk about later (sharing rules, Role Hierarchy, Sales Teams and Account teams, manual sharing, etc).
There are four levels of access that can be set:
Private
Public Read/Only
Public Read/Write
By default after creating custom object OWD access level is Public Read/Write.
Private: only owner and above hierarchy users can have Read/Write access and below hierarchy users don’t have any access.
Public Read only: only owner and above hierarchy users can have Read/Write access and below hierarchy users can have only Read Only.
Public Read/Write: Irrespective of role hierarchy everyone can have Read/Write permissions on the records.