Monetarist economists might conclude that the accelerator hypothesis supports their position via fiscal policy since

Question

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The accelerator hypothesis suggests that investments in capital goods are driven by changes in expected sales. Monetarist economists believe that changes in monetary policy (such as changes in interest rates) will affect investment decisions and thereby aggregate output. The slow closure of the gap between desired and existing capital stocks, as suggested by the accelerator hypothesis, strengthens the Monetarist position by suggesting that changes in investment decisions will have a slower and more gradual effect on output. Thus, choice A is correct. Choices B and C are not directly related to the accelerator hypothesis or Monetarist economics.

Monetarist Economists Might Conclude That the Accelerator Hypothesis Supports Their