Which of the following terms refers to the positive feedback from aggregate demand to investment?
A)the investment multiplier
B)the stock-market effect
C)the investment accelerator
D)the crowding-in multiplier

Question

Quizplus · Accepted Answer

The investment accelerator refers to the positive feedback from aggregate demand to investment. As demand for goods and services increases, businesses respond by investing in production to meet the higher demand. This can create a cycle of increasing demand and investment, known as the investment accelerator. The investment multiplier refers to the increase in income and output that results from an initial increase in aggregate demand. The stock-market effect refers to the impact of stock prices on consumption through changes in wealth. The crowding-in multiplier refers to the increase in private investment that results from an increase in government spending.

Which of the Following Terms Refers to the Positive Feedback