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    Question

    This question obtained (1) Marks: 

    Accelerator and multiplier stand for  

    A The same thing and lead to an increase in output of the economy. Correct Answer Incorrect Answer
    B The same thing and cause an increase in investment and increase in output. Correct Answer Incorrect Answer
    C Different things with the first causing a change in investment due to a change in output and the second causing a change in output due to a change in investment. Correct Answer Incorrect Answer
    D Different things with the first causing a change in output due to a change in investment and the second causing a change in investment due to a change in output. Correct Answer Incorrect Answer
    E None of these Correct Answer Incorrect Answer

    Solution

      Accelerator and multiplier both have different meanings. Accelerator measures the change in investment due to change in output.  Multiplier measures an initial change in spending to the total change in the activity which will result.

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