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).
They have to _____________ with elephants, hippos, bushpigs, porcupines, vervet monkeys, baboons and birds which are after their crops.
... Fill in the blanks with appropriate words/phrases from the options.
Steps to implement all the recommendations of the Reconciliation Commiss...
The comfortable chaise in the corner of the room was her favourite spot to ____ with a good book and relax.
In each of the following sentences, there is a blank space. Below each such sentence, there are five options with one word each. Fill up the blank with...
Which word can fill in the following sentence?
The ______ sandpaper was used to smooth out the rough edges of the wooden table.
Choose the most appropriate word to fill in the blank:
His ability to __________ complex problems has earned him a reputation as an expert in h...
- Choose the appropriate word or phrase from the options given to fill in the blanks.
Although she was new to the subject, she __________ the concept... It took us hours to wake Willie from his ___________ stupor.Â
Choose the most appropriate word from the options that can fill the blanks.
While the central bank's cautious stance helped contain inflation ...
The ___________ effect of covid was seen in him when he was breathing heavily even a month after testing negative.
