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Difficulty: EasyFactors of Production and Their Rewards

In commerce, interest is the economic reward accrued to capital as a factor of production.

Answer: Answer

Answer

The statement is true because interest is the reward for capital as a factor of production.
The statement is accurate because capital represents productive assets whose owners receive interest as compensation for making funds or equipment available for productive use.

Step-by-Step Solution

1
Identify the factor of production mentioned in the statement.
The factor of production is capital.
Capital consists of man-made resources and financial funds used to assist further production.
2
Match the factor of production to its corresponding economic reward.
Capital earns interest as its economic reward.
In classical commerce and economics, land earns rent, labour earns wages/salaries, capital earns interest, and enterprise earns profit.
3
Evaluate the truth value of the stem.
The statement correctly pairs capital with interest.
Because the pairing is accurate, the statement is true.

Key Concept

Factors of production and their rewards
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Topics

Factors of Production and Their Rewards

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