The annual income from an investment expressed as a proportion (usually a percentage) of the original investment.
- The standard story of entry and exit leads to a long-run equilibrium in which all firms earn only a normal rate of return on investment.
- It will also use the money for financing investments that will produce a better rate of return than the interest it will have to pay on its new loan notes.
- In order to do that, the tax system must let savers earn the full gross rate of return on their investments.
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