What does the accelerator principles state?

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Economics JAMB 2015

What does the accelerator principles state?

  • Consumption is a function of the rate of change of income
  • income is a function of the rate of change of investment
  • Investment is a function of the rate of change of income checkmark
  • Investment is a function of the rate of interest

The correct answer is: C

Explanation

Investment depends on the rate of change in income and that a change in income will cause a greater proportionate change in investment.
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