In the context of investment decisions, comparing the expected rate of return to the real interest rate is similar to comparing the marginal benefit to the marginal cost of an investment.
Here's the breakdown:
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Expected Rate of Return: This represents the anticipated gains from an investment.
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Real Interest Rate: This reflects the opportunity cost of capital, essentially the return you could earn on an alternative investment (after adjusting for inflation).
When deciding whether to invest, you want to ensure that the expected rate of return on your investment exceeds the real interest rate. If the expected return is greater than the real interest rate, it suggests that the investment is a good opportunity, akin to saying the marginal benefit of the investment exceeds the marginal cost.
In summary, your statement aligns well: comparing the expected rate of return to the real interest rate in investment decisions is analogous to comparing the marginal benefit to the marginal cost.