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

Question

Quizplus · Accepted Answer

The marginal benefit from investment is the additional benefit gained from investing one more unit of capital in the current period. This additional benefit is measured as the increase in the present value of expected profits resulting from the additional investment. Therefore, option A is the best choice as it is the most accurate definition of marginal benefit.

The Marginal Benefit from Investment Is