Question no 3099 SSC CGL Tier 1 Genral Awareness Questions and Answers Online Test 95

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1 .

Who defined investment as 'the construction of a new capital asset like machinery or factory building' ?

[ A ] Hansen
[ B ] J.M. Keynes
[ C ] Harrod
[ D ] J.R. Hicks

Answer : Option B

Explanation :

Investment expenditure refers to the creation of new assets i.e. an addition to the stock of existing capital assets. Accordi ng t o Keynes investment demand, depends upon two factors: (a) Expected rate of profit which he calls as Marginal Efficiency of Capital (MEC). Investment demand increases with the increase in the expected rate of profit, (b) the rate of interest (IR). Investment demand decreases with the increase in the rate of interest.

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