The Minimum Rate of Return or Payment Necessary to Keep

question 141

Multiple Choice

The minimum rate of return or payment necessary to keep an entrepreneur in some specific enterprise is referred to as

• A) the pure rate of interest.
• B) the real interest rate.
• C) economic profit.
• D) normal profit.

---

Definitions:

Economic Growth

(1) An outward shift in the production possibilities curve that results from an increase in resource supplies or quality or an improvement in technology; (2) an increase of real output (gross domestic product) or real output per capita.

Self-Interest

is the motivation by individual personal gain as the driving force behind economic decisions and actions.

Market System

In this economic framework, decisions related to investment, production, and distribution are governed by supply and demand forces, and the cost of goods and services is dictated by an unrestricted pricing mechanism.

Market System

An economic system where decisions regarding investment, production, and distribution are based on supply and demand, with prices being determined by free competition among private businesses.