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What is the primary difference between the Marginal Efficiency of Capital (MEC) and the Marginal Efficiency of Investment (MEI)?
- a)MEC considers the rate of discount, while MEI considers the interest rate.
- b)MEC is concerned with investment change, while MEI is concerned with capital stock change.
- c)MEC is a physical quantity, while MEI is a percentage rate.
- d)MEC accounts for short-run factors, while MEI accounts for long-run factors.
Correct answer is option 'B'. Can you explain this answer?
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What is the primary difference between the Marginal Efficiency of Capi...
The primary difference is that MEC is concerned with the change in the capital stock, specifically the relationship between the rate of interest and the optimal level of capital stock. MEI, on the other hand, relates to investment change and how it affects the rate of interest. MEI considers short-term changes in investment.
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What is the primary difference between the Marginal Efficiency of Capi...
Primary Difference between MEC and MEI:
MEC is concerned with investment change, while MEI is concerned with capital stock change.
- MEC refers to the Marginal Efficiency of Capital, which focuses on determining the rate of return expected from a particular investment. It evaluates the profitability of investing in additional units of capital.
- MEI stands for the Marginal Efficiency of Investment, which looks at the change in the total capital stock resulting from an investment. It considers the impact of investment on the overall capital accumulation within an economy.
Explanation:
MEC assesses the expected return from a particular investment project and helps in making decisions regarding the allocation of resources. On the other hand, MEI looks at the impact of investment on the overall capital stock of an economy, considering the long-term implications of investment decisions.
In essence, MEC focuses on the profitability of individual investment projects, while MEI considers the broader implications of investment on the economy's capital stock. Both concepts are essential in understanding the dynamics of investment and capital accumulation within an economy.
MEC is concerned with investment change, while MEI is concerned with capital stock change.
- MEC refers to the Marginal Efficiency of Capital, which focuses on determining the rate of return expected from a particular investment. It evaluates the profitability of investing in additional units of capital.
- MEI stands for the Marginal Efficiency of Investment, which looks at the change in the total capital stock resulting from an investment. It considers the impact of investment on the overall capital accumulation within an economy.
Explanation:
MEC assesses the expected return from a particular investment project and helps in making decisions regarding the allocation of resources. On the other hand, MEI looks at the impact of investment on the overall capital stock of an economy, considering the long-term implications of investment decisions.
In essence, MEC focuses on the profitability of individual investment projects, while MEI considers the broader implications of investment on the economy's capital stock. Both concepts are essential in understanding the dynamics of investment and capital accumulation within an economy.
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What is the primary difference between the Marginal Efficiency of Capital (MEC) and the Marginal Efficiency of Investment (MEI)?a)MEC considers the rate of discount, while MEI considers the interest rate.b)MEC is concerned with investment change, while MEI is concerned with capital stock change.c)MEC is a physical quantity, while MEI is a percentage rate.d)MEC accounts for short-run factors, while MEI accounts for long-run factors.Correct answer is option 'B'. Can you explain this answer?
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What is the primary difference between the Marginal Efficiency of Capital (MEC) and the Marginal Efficiency of Investment (MEI)?a)MEC considers the rate of discount, while MEI considers the interest rate.b)MEC is concerned with investment change, while MEI is concerned with capital stock change.c)MEC is a physical quantity, while MEI is a percentage rate.d)MEC accounts for short-run factors, while MEI accounts for long-run factors.Correct answer is option 'B'. Can you explain this answer? for B Com 2024 is part of B Com preparation. The Question and answers have been prepared according to the B Com exam syllabus. Information about What is the primary difference between the Marginal Efficiency of Capital (MEC) and the Marginal Efficiency of Investment (MEI)?a)MEC considers the rate of discount, while MEI considers the interest rate.b)MEC is concerned with investment change, while MEI is concerned with capital stock change.c)MEC is a physical quantity, while MEI is a percentage rate.d)MEC accounts for short-run factors, while MEI accounts for long-run factors.Correct answer is option 'B'. Can you explain this answer? covers all topics & solutions for B Com 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for What is the primary difference between the Marginal Efficiency of Capital (MEC) and the Marginal Efficiency of Investment (MEI)?a)MEC considers the rate of discount, while MEI considers the interest rate.b)MEC is concerned with investment change, while MEI is concerned with capital stock change.c)MEC is a physical quantity, while MEI is a percentage rate.d)MEC accounts for short-run factors, while MEI accounts for long-run factors.Correct answer is option 'B'. Can you explain this answer?.
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