The expected rate of return from an additional unit of capital invested is termed as _____________.

Marginal efficiency of capital (MEC)

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Marginal efficiency of investment (MEI)

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Both A & B

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Neither A nor B

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Solution

The correct option is C Both A & B
Marginal efficiency of capital (MEC) or Marginal efficiency of investment (MEI) refers to the expected rate of return from the allocation of a proportion of income or capital invested in the business. It is the rate of return which is expected as per the economic behavior of the business since past few years.

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