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      Question

      If income increase, the investment will ______

      A Increase Correct Answer Incorrect Answer
      B Decrease Correct Answer Incorrect Answer
      C No change Correct Answer Incorrect Answer
      D None of the above Correct Answer Incorrect Answer
      E Any of the above Correct Answer Incorrect Answer

      Solution

      As per the accelerator principle, when income or consumption  increases,   investment  will  increase by a multiple amount. The accelerator  is  the  numerical  value  of  the  relation  between  the  increase  in  investment resulting from an increase in income.

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