is interest earned? In what sense is capital productive?

is interest earned?

In what sense is capital productive?

Expert Solution

Interest earned can also be called internet income. It is the amount earned by the investors as they place their money or funds in the investment portfolio or banks. For example,

Money deposited by an individual in the savings accounts that are operated by the banks. This money then earns the interest which becomes the income of the investor or the individual.

or Debentures which are the debt instruments in which the investors can place their money. The returns we get from this investment is also an interest earned.

However, these investments or projects have different rates thus their earnings vary according to the type of investment one chooses to partake in.

Capital is said to be productive when the physical capital is being optimal to provide or produce the goods services in an economy.

Physical capital here means the factor of production such as machinery, computers, etc., excluding labor.

Productivity of a capital is a very important source for the growth of any nation.

Rahul Sunny answered 3 years ago

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