You borrow $10,000 at an interest rate of 5% to open Movies Galore, a DVD rental store. You will earn an economic loss if

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An economic loss occurs when the return on investment is less than the cost of the investment. In this case, if the return is less than the 5% interest rate on the borrowed $10,000, you are not making enough to cover the cost of borrowing, leading to an economic loss.

You Borrow $10,000 at an Interest Rate of 5% to Open