The multiplier accelerator model assumes ____ depends on ______?
Correct answer: C. investment expected future profits
- A. consumption expected future profits
- B. investment, interest rates
- C. investment expected future profits
- D. stock building interest rates
Explanation
In the multiplier-accelerator model, investment responds to expected future profitability, while changes in consumption and income generate the multiplier effects. Interest rates are important in other investment theories but are not the defining assumption here.
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