PRC-3 · Chapter 15 · Question 33 of 44
Economist Paul Samuelson argued that the recurring, wave-like fluctuations of the business cycle are not random, but are actively driven by the dynamic interaction between:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) The Multiplier and the Accelerator
Explanation
Samuelson's model explains business cycles as the interaction where multiplier-induced consumption triggers accelerator-induced investment, feeding a boom until capacity halts it.
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