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Economics (AS & A Level) · Feb / March 2023 · Paper 32 · Question 21

9708The circular flow of income

What does the accelerator principle state?

  1. AConsumption is a function of the rate of change of income.
  2. BIncome is a function of the rate of change of investment.
  3. CInvestment is a function of the rate of change of income.
  4. DInvestment is a function of the rate of interest.

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Correct answer: C. Investment is a function of the rate of change of income.

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