Economy, asked by shagspoorti5228, 9 months ago

Marginal efficiency of capital how does it determines investment

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Answered by itzBrainlyBoy
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Marginal efficiency of capital. The marginal efficiency of capital (MEC) is that rate of discount which would equate the price of a fixed capital asset with its present discounted value of expected income. ... The MEC needs to be higher than the rate of interest, r, for investment to take place.

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Answered by Anonymous
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Answer:

Marginal efficiency of capital. The marginal efficiency of capital (MEC) is that rate of discount which would equate the price of a fixed capital asset with its present discounted value of expected income. ... The MEC needs to be higher than the rate of interest, r, for investment to take place.

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