Q.

The principle of accelerator explains the process by which

A. An increase (or decrease) in the demand for consumption goods leads to an increase (or decrease) in the investment on capital goods
B. The ratio between induced investment and an initial change in consumption expenditure
C. An increase (or decrease) in the investment on capital goods leads to an increase (or decrease) in the demand for consumption goods
D. None of the above
Answer» A. An increase (or decrease) in the demand for consumption goods leads to an increase (or decrease) in the investment on capital goods
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Macroeconomics 2

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