4 Questions
What does the multiplier concept explain?
The proportional increase or decrease in final income resulting from a change in spending or investing
What does the accelerator concept explain?
How changes in consumer demand influence businesses to invest
Why is the multiplier concept important in macroeconomics?
It shows how a small change in spending can have a larger impact on the economy
What is the formula for the multiplier?
1/(1-MPC)
Test your understanding of multiplier and accelerator concepts in macroeconomics. Learn how these two concepts measure the impact of changes in economic variables and influence economic activities.
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