Question
In the context of the Investment Function, which of the
following best describes the 'Accelerator Principle'?Solution
The Accelerator Principle is a theory of induced investment. It posits that the level of net investment (I) is a function of the rate of change in output (ΔY) or national income, not its absolute level. The logic is that an increase in demand (output) requires an increase in the capital stock to produce it. The accelerator coefficient (v = I/ΔY) represents the desired capital-output ratio. So, if output is growing, investment is high to add new capacity. If output growth slows, investment falls. This contrasts with theories where investment depends on the cost of capital (interest rates, option a & d) or is autonomous (option c).
We often ___________ the two concepts of audit responsibility and account responsibility.
Fill in the blank with the most appropriate word.
No wonder the burglars are at large. The police is in ______ with them.
The countries close to the Russian border, namely the Baltic states and Poland, had _____________ against such a possibility, which they considered the...
The doctors have ___________ the cause of the illness to an unknown virus.
In the question below, a sentence is given with two words missing. You are given five options containing a pair of words that can fill the blanks makin...
Choose the correct word(s) to fill in the blank.
It was my sister’s birthday and all ____ us ____ the family wanted to buy a gift _____ her.
Despite several British attempts to persuade them, the Dutch Republic refused __________ their former allies in the war and remained neutral.
Corals are colonial animals that resemble humans in one respect: they’re great engineers. Corals construct reefs by excreting calcium carbonate. H...
- In the following sentence, there is a blank space. Below each such sentence, there are four options with one word each. Fill up the blank with the word tha...
Fill in the blank/s with suitable Word/s:
The scientist wanted to _________ his theory by conducting more experiments.
