Card 86 / 100: Explain the distinction economists often make between interest and profit.
Answer:
Gross or accounting profit is total revenue minus out-of-pocket expenditures. However, this calculation ignores the interest on the invested capital. Even if a business venture "makes money," if the investor could have ended up with even more money through a different (and equally safe) investment, then in a sense the investor actually suffered a loss. Sample Partial Credit Answer Profit can mislead if it doesn't include interest.
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