Economics 9708 · AS & A Level · Unemployment

Unemployment — practice question

The diagram shows the way in which a higher growth rate of national income may cause national income to rise again. increase in national income -> growth rate -> operation of ......1...... -> operation of ......3...... -> increase in national income -> change in ......2...... What should be added at positions 1, 2 and 3 in the diagram?

  • A1 the accelerator, 2 induced investment, 3 the accelerator
  • B1 the accelerator, 2 induced investment, 3 the multiplier
  • C1 the multiplier, 2 autonomous investment, 3 the accelerator
  • D1 the multiplier, 2 autonomous investment, 3 the multiplier

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