Regarded widely as the cornerstone of Keynesian thought, the book challenged the established classical economics and introduced important concepts such as the consumption function, the multiplier, the marginal efficiency of capital, the principle of effective demand and liquidity preference.
2.
On top of the supply of money, Keynes identified the propensity to consume, inducement to invest, marginal efficiency of capital, liquidity preference, and multiplier effect as variables which determine the level of the economy's output, employment, and price levels.
3.
Briefly, the " General Theory " argued that the level of employment in a modern economy was determined by three factors : the marginal propensity to consume ( the percentage of any increase in the income that people chose to spend on goods and services ), the marginal efficiency of capital ( the cut-off rate used to see whether investments are worthy, which are dependent on anticipated rates of return ) and the rate of interest.
4.
The marginal efficiency of capital as well as the rate of interest would both be brought down to zero, and if population was not increasing rapidly society would finally " . . . attain the conditions of a quasi-stationary community where change and progress would result only from changes in technique, taste, population and institutions . . . " Keynes believed this development would bring about the disappearance of the rentier class, something he welcomed : Keynes argued that rentiers incurred no sacrifice for their earnings, and their savings did not lead to productive investments unless aggregate demand in the economy was sufficiently high . " I see, therefore, the rentier aspect of capitalism as a transitional phase which will disappear when it has done its work ."
How to say marginal efficiency of capital in Hindi and what is the meaning of marginal efficiency of capital in Hindi? marginal efficiency of capital Hindi meaning, translation, pronunciation, synonyms and example sentences are provided by Hindlish.com.
Mobile