PRC-3 · Chapter 15 · Question 26 of 44
A factory realizes it requires Rs. 6 million worth of heavy capital machinery to permanently generate Rs. 1 million worth of extra annual output. In the accelerator model, the value '6' represents the:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Capital-Output ratio (v)
Explanation
The capital-output ratio (v) indicates the amount of capital required to produce one unit of output, a key determinant of the accelerator effect's strength.
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