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Economics (AS & A Level) · Feb / March 2025 · Paper 32 · Question 15

9708The circular flow of income

What does the accelerator principle explain?

  1. Ahow changes in consumption lead to changes in income
  2. Bhow changes in income lead to changes in consumption
  3. Chow changes in income lead to changes in investment
  4. Dhow changes in investment lead to changes in income

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Correct answer: C. how changes in income lead to changes in investment

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