The concept of 'Accelerator Principle' states that:
A. Saving depends only on income
B. Investment depends on the rate of change of income or output
C. Consumption depends on the rate of interest
D. Investment depends on the level of income
Answer: Option B
Solution (By JKSSB Mock Tests)
The accelerator principle posits that net investment is a function of the change in output or income; a rise in demand induces a multiple increase in investment.
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