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Imagine a child who consistently gets mediocre grades and is often picked last for a team when games are played at recess.However,he likes to make silly jokes and play pranks,and he notices that people laugh when he does those things.The child starts to think that others are laughing with him,not at him.This is part of the process that Charles Cooley called:
Interest Rate
The percentage charged on a loan or paid on savings over a specific period, reflecting the cost of borrowing or the reward for saving.
Normal Return
The minimum profit necessary to keep a factor of production in its current use, essentially the opportunity cost of using resources.
Investment
The allocation of resources, such as capital or time, into a venture with the expectation of generating future returns.
Retained Earnings
The portion of net income that is not distributed to shareholders but instead reinvested back into the company.
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