The Competitive Rate of Return on Capital Can Be Equal

question 32

Multiple Choice

The competitive rate of return on capital can be equal to the interest rate only if you eliminate:

• A)monopolies and unions.
• B)risk, inflation, and imperfect competition.
• C)government intervention.
• D)imperfect competition and externalities.
• E)externalities.

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Definitions:

Correlation

A quantitative measure demonstrating how closely two or more variables vary together.

Causation

The action of causing something, indicating a relationship between two events where one is the result of the other.

Third-variable Problem

The third-variable problem occurs when a previously unconsidered variable affects both variables of interest, potentially falsely suggesting a causal relationship between them.

Correlational Studies

Research methods used to examine a relationship between two or more variables without manipulating them.