Keynes use which concept of investment
Answers
Answer:
According to Keynes investment decisions are taken by comparing the marginal efficiency of capital (MEC) or the yield with the real rate of interest (r). ADVERTISEMENTS: So long as the MEC is greater than r, new investment in plant, equipment and machinery will take place.
Answer:
The term investment multiplier refers to the concept that any increase in public or private investment spending has a more than proportionate positive impact on aggregate income and the general economy. It is rooted in the economic theories of John Maynard Keynes.
Explanation:
In Keynesian terminology, investment refers to real investment which adds to capital equipment. It leads to increase in the levels of income and production by increasing the production and purchase of capital goods. ... The amount of capital available in an economy is the stock of capital. Thus capital is a stock concept.