The real rate of return can be justified, at a basic level, by:
A) compensation for inflation.
B) compensation for deferring consumption.
C) compensation for the level of international borrowing.
D) all of the above.

Question

Quizplus · Accepted Answer

The real rate of return is primarily justified by compensation for deferring consumption, as it represents the reward investors require for postponing their consumption and investing their money.

The Real Rate of Return Can Be Justified, at a Basic