An initial injection of new investment triggers the income multiplier into action and people's incomes and consumption spending grow. Firms expect the growth to continue and purchase more investment goods. The coupling of the effects of the accelerator and the effects of the income multiplier
a. work against each other
b. creates no gain in the economy as the effects cancel each other out
c. creates the downward phase of the business cycle
d. creates the upward phase of the business cycle
e. explains why real business cycle theorists believe the economy is unstable and cyclical
D
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