Determination of Income and Employment

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Induced Investment: Induced investment refers to the investment which depends on the profit expectations and is directly influenced by income level (only for reference).

Autonomous Investment: Autonomous investment refers to the investment which is not affected by changes in the level of income and is not induced solely by the profit motive. It is income inelastic.

Marginal Efficiency of Investment (MEI): It refers to an expected rate of return from marginal (or additional) unit of investment.