According to ---------- Theory, Interest Is the Reward for the Productive

question 24

Multiple Choice

According to ---------- theory, Interest is the reward for the productive use of the capital which is equal to the marginal productivity of physical capital.

• A)Loanable Fund theory
• B)Productivity theory
• C)Abstinence theory
• D)Classical theory

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Definitions:

Boot

Additional value or cash added to a transaction to even out an exchange or transfer of assets.

Fixed Asset

A fixed asset is a long-term tangible piece of property or equipment that a company owns and uses in its operations to generate income, not easily converted into cash.

Intangible

An intangible asset is an asset that lacks physical substance, such as intellectual property, goodwill, and licensing agreements.

Amortization

The process of spreading the cost of an intangible asset over its useful life, recognizing a portion of the expense each accounting period.