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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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