An economic analysis suggests that each 1 percent increase in air travel results in a 3 percent increase in the demand for aircraft. Which concept does this link most clearly represent?

Question

Quizplus · Accepted Answer

The accelerator principle suggests that an increase in demand for a product (air travel) leads to a more than proportional increase in the demand for the capital goods needed to produce that product (aircraft).

An Economic Analysis Suggests That Each 1 Percent Increase in Air