Question

Interest is a factor income for ______.

Options

• Land

• Labour

• Capital

• Entrepreneur

Answer 1

Interest is a factor income for capital.

Explanation:

Interest is the income earned from the use of capital. It is the payment made to the owners of capital (such as investors or lenders) for the use of their funds. In the context of factors of production, interest is the return on capital, similar to how rent is the return on land, wages are the return on labor, and profit is the return on entrepreneurship.