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2.2 How the macroeconomy works: the circular flow of income, aggregate demand/aggregate supply analysis and related concepts

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Question 7

An increase in the rate of growth of national output leads to a disproportionately large change in planned capital investment by firms. This economic relationship is best explained by

the action of the multiplier.

the action of the accelerator.

a fall in the marginal propensity to save.

an increase in spare productive capacity.

2.2 How the macroeconomy works: the circular flow of income, aggregate demand/aggregate supply analysis and related concepts Questions

  1. A Level
  2. /Economics
  3. /2.2 How the macroeconomy works: the circular flow of income, aggregate demand/aggregate supply analysis and related concepts