Here is an essay on ‘Investment Function’ for class 9, 10, 11 and 12. Find paragraphs, long and short essays on ‘Investment Function’ especially written for school and college students. Investment function provide micro foundation for our study of macroeconomics. Investment is capital formation, i.e., the acquisition and creation of resources to be used in production. And capital goods are [...]
This article will help you to learn about the difference between Marginal Efficiency of Capital (MEC) and Marginal Efficiency of Investment (MEI). Difference between Marginal Efficiency of Capital and Marginal Efficiency of Investment Keynes used the term 'marginal efficiency of capital' to refer to the unique rate of discount which would make the present value of the expected net returns [...]
The following article will guide us to learn about how to calculate Marginal Efficiency of Capital (MEC) and investment. Normally, we conceive of an investment project as the purchase of an asset which yields a stream of returns (cash flows) over time. (R1, R2,...., Rn) where the last return includes the scrap value of the income-earning asset or capital goods [...]