The accelerator theory explains the level of investment in terms of changes in national income and hence consumer demand.

Name: The accelerator theory explains the level of investment in terms of changes in national income and hence consumer demand.
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The accelerator theory posits that the level of investment by firms is related to the rate of change in national income or output, suggesting that an increase in consumer demand can lead to a proportional increase in investment to meet this demand.

The Accelerator Theory Explains the Level of Investment in Terms