Firms pay out a portion of their earnings in the form of interest and dividends, and those payments are a portion of the economy's capital income.

Question

Quizplus · Accepted Answer

Firms distribute a portion of their earnings to investors in the form of dividends (for equity holders) and interest payments (for debt holders), which are considered part of the economy's capital income, reflecting the return on investments in capital assets.

Firms Pay Out a Portion of Their Earnings in the Form