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Economic Definition of MEI. Defined.

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Term MEI Definition: The abbreviation for marginal efficiency of investment, which is the anticipated rate of return on a capital investment project undertaken by a business firm. Businesses typically compare the MEI on physical capital with interest rate returns on financial capital when deciding to undertake an investment project. Because different investment projects have different returns, businesses often have a range of alternatives projects from which to choose. Combining all projects throughout the economy gives rise to an investment demand curve relating investment expenditures to the interest rate.

 

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