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Capital + Interest R Matching
Liquidity Preference
The desire of an individual to hold his/her wealth cash form.
Capital Widening
An increase in the use of capital which leaves the ratio of capital to labour unchanged.
Capital Deepening
An increase in the use of capital which increases the ratio of capital to labour.
WMarginal Efficiency of capital
The extra profit earned as a result of the employment of an extra unit of captial.
Real Rate of Interest
The nominal rate of interest minus the rate of inflation.
Consumer Goods
Those goods that give consumers utility and for which they are willing to pay a price.
Investment Ratio
Gross investment as a percentage of GNP.
Capital Goods
Those goods used in the production of other goods.
Nominal Rate of Interest
The rate of interest received by the saver.
Saving
That part of income that is not spent.
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Created by: jmartineconomics
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