An Incentive

question 72

Multiple Choice

An incentive

• A)could be a reward but could not be a penalty.
• B)could be a penalty but could not be a reward.
• C)could be either a reward or a penalty.
• D)is the opposite of a tradeoff.
• E)occurs in the macroeconomy but not in the microeconomy.

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Definitions:

Uninsurable Risk

A risk that is not acceptable for insurance coverage due to its high likelihood of loss.

Interest Rate

Interest Rate is the percentage charged on the total amount borrowed or earned, serving as the cost of borrowing or the reward for saving.

Interest Rates

Interest rates are the cost of borrowing money expressed as a percentage of the total loan amount, influencing economic activity by affecting consumer spending and investment.

Capital

The wealth in the form of money or assets, used or invested in order to generate further wealth.