Economics of f585

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Accelarator theory
sugests that the rate of income change will determine the level of investment in the economy, if national income is increasing at an increasing rate, then net investment
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when the accelarator effect tends to be high?
when the available supply of funds for investment is high.
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how firms react to growing demand
expand production, and make a fuller use of their existing productive capacity, by running down their stocks,
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criticism
adjustment costs of installation of capital machinary, time lags
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capital output ratio low means? signals the productivity of an economy
that the high volume of outpute will be produced with little capital, if capital ratio output is high then low volumes of output will be produced even with high levels of capital available
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rate of growth of GDP equals
savings ratio and capital output ratio
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Card 2

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when the available supply of funds for investment is high.

Back

when the accelarator effect tends to be high?

Card 3

Front

expand production, and make a fuller use of their existing productive capacity, by running down their stocks,

Back

Preview of the back of card 3

Card 4

Front

adjustment costs of installation of capital machinary, time lags

Back

Preview of the back of card 4

Card 5

Front

that the high volume of outpute will be produced with little capital, if capital ratio output is high then low volumes of output will be produced even with high levels of capital available

Back

Preview of the back of card 5
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