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What is MEC and MEI in Investment Economics about?

The document discusses the concepts of Marginal Efficiency of Capital (MEC) and Marginal Efficiency of Investment (MEI), introduced by J.M. Keynes, which analyze investment demand and expected returns on capital goods. MEC is defined as the rate of return that equates the present value of expected future returns from an investment to its supply price, while MEI considers the impact of changing prices of capital goods on investment decisions. The document also outlines factors influencing MEC, limitations of

Author

muna.subedi

Language

EN