JAMB - Economics (2015 - No. 55)
What does the accelerator principles state?
Consumption is a function of the rate of change of income
income is a function of the rate of change of investment
Investment is a function of the rate of change of income
Investment is a function of the rate of interest
Explanation
Investment depends on the rate of change in income and that a change in income will cause a greater proportionate change in investment.