Marginal efficiency of capital how does it determines investment
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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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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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