Full formEducation
MEWstands forMarginal Efficiency of Capital
Full Form of MEW
What is MEW?
Marginal Efficiency of Capital (MEW) is an economic concept that refers to the expected rate of return on an additional unit of capital investment, such as a new machine or factory. In the Indian context, MEW is a critical factor studied in macroeconomics and business cycles, particularly within the curriculum of CBSE, ICSE, and competitive exams like UPSC, SSC, and banking. It helps explain how businesses decide to invest based on anticipated profitability. When MEW is high, firms are more likely to expand production, spurring economic growth; when it falls, investment slows down, often leading to recession. In India, the concept is used by policymakers and analysts to gauge private sector investment sentiment and to design fiscal or monetary measures. It also appears in discussions on the Keynesian theory of employment and the multiplier effect. For students preparing for Indian civil services or economics exams, understanding MEW is essential as it forms the basis for investment demand analysis and is frequently asked in questions related to national income and economic fluctuations. The term is taught in higher secondary and undergraduate economics courses across Indian universities.
MEW का फुल फॉर्म
पूंजी की सीमांत दक्षता
Example
The rise in MEW for the renewable energy sector encouraged Indian firms to invest heavily in solar panel installations.
MEW — frequently asked questions
What is the full form of MEW?
The full form of MEW is Marginal Efficiency of Capital, a key concept in macroeconomics that measures the expected return from an additional unit of capital.
How is MEW relevant for Indian competitive exams?
MEW is a frequently tested topic in Indian civil services, SSC, and banking exams because it explains investment behaviour, the multiplier effect, and economic cycles.
What is the difference between MEW and MEC?
MEW (Marginal Efficiency of Capital) and MEC (Marginal Efficiency of Capital) are often used interchangeably. In some textbooks, MEC refers to the rate of discount that equalises the present value of returns with the cost of capital, while MEW is a broader term for expected profitability.