PRC-3 · Chapter 15 · Question 25 of 44
Economist Paul Samuelson proposed that the constant, wave-like fluctuations of the business cycle (booms followed by recessions) are primarily driven by the dynamic interaction between:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) The Multiplier and the Accelerator
Explanation
Samuelson's model explains business cycles through the interplay of the multiplier (consumption) and accelerator (investment) fueling growth until capacity limits cause a collapse.
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