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What does the accelerator principles state?

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What does the accelerator principles state?

A.

Consumption is a function of the rate of change of income

B.

Income is a function of the rate of change of investment

C.

Investment is a function of the rate of change of income

D.

Investment is a function of the rate of interest

Correct answer is C

Investment depends on the rate of change in income and that a change in income will cause a greater proportionate change in investment.