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Question
Define Accelerator.
Definition
Short Note
Solution
- The accelerator coefficient is the ratio between induced investment and an initial change in consumption.”
- Assuming the expenditure of ₹50 crores on consumption goods, if industries lead to an investment of ₹100 crores in investment goods industries, we can say that the accelerator is 2.
- Accelerator = `100/"ΔY"` = 2
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The Accelerator Principle
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