The concept of 'Multiplier-Accelerator Interaction' is associated with:
A. Public finance theories
B. Business cycle theories
C. Monetary theories
D. International trade theories
Answer: Option B
Solution (By JKSSB Mock Tests)
The interaction between the multiplier and accelerator is used in theories of business cycles (e.g., by Samuelson and Hicks) to explain fluctuations in economic activity.
Explanation:
Because high-risk individuals have a greater incentive to buy insurance at any given premium, the insured pool tends to be riskier than the population average, driving up premiums and potentially causing market unraveling.
Explanation:
Soft loans are provided by multilateral agencies or governments at below-market interest rates with longer maturities and grace periods, often for development purposes.
No comments yet. Be the first to start the discussion!