Explaining the Multiplier and the Accelerator
- AS, A-Level, IB
- AQA, Edexcel, OCR, IB, Eduqas, WJEC
Last updated 27 Jun 2020
In this recorded revision webinar, I take students through the concepts of the Multiplier and Accelerator effects - two key topics in AS Macro Economics.
Where planned capital investment is linked positively to the past and expected growth of consumer demand or national income
If there is an initial injection (e.g. a rise in exports), then the final increase in aggregate demand and real GDP will be greater. The size of the multiplier coefficient is affected by the marginal rate of withdrawal / leakage from the circular flow of income.