The marginal benefit from investment is
A) the ratio of investment to expected future profits.
B) is related to economic activity and the real interest rate.
C) is what one unit of investment in the current period adds to the present value of profits.
D) is what one unit of investment adds to the current capital stock.
E) is what one unit of investment costs when funds are borrowed.

Question

Quizplus · Accepted Answer

Marginal benefit from investment is the additional benefit acquired from investing one more unit of a resource. In this case, it is referring to the additional benefit in terms of monetary profits. Therefore, the correct answer is C, as it defines the marginal benefit as what one unit of investment in the current period adds to the present value of profits.

The Marginal Benefit from Investment Is