Understanding the Accelerator Effect
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- AQA, Edexcel, OCR, IB, Eduqas, WJEC
Last updated 2 Jul 2018
What is the accelerator effect?
The accelerator effect happens when an increase in national income (GDP) results in a proportionately larger rise in capital investment spending. In other words, we often see a surge in capital spending by businesses when an economy is growing quite strongly.
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