The positive feedback from demand to investment is called:
A)the investment multiplier
B)the investment accelerator
C)the multiplier accelerator
D)the demand accelerator

Question

Quizplus · Accepted Answer

The positive feedback from demand to investment is known as the investment accelerator, which states that an increase in demand will lead to a proportionately larger increase in investment. Choice A is incorrect because the investment multiplier refers to the effect a change in investment has on total output. Choices C and D are incorrect because the terms "multiplier" and "accelerator" are not used together in economics.

The Positive Feedback from Demand to Investment Is Called