In the six months following the September 11,2001,terrorist attacks,consumer demand for large American flags saw a 200 percent increase,but the Eagle Manufacturing Company had a 500 percent increase in orders for the special machine that mass produces the larger flags.What is this dramatic increase due to?

Question

Quizplus · Accepted Answer

The dramatic increase is due to the accelerator principle, which suggests that an increase in consumer demand for goods can lead to a significantly larger increase in demand for the equipment needed to produce those goods, as seen in the increased orders for the flag-producing machine.

In the Six Months Following the September 11,2001,terrorist Attacks,consumer Demand