By the accelerator hypothesis, if a firm's actual sales jump in one period to a higher maintained level, that firm's replacement investment
A) also jumps in one period to a higher maintained level.
B) gradually drifts upward to a higher maintained level.
C) jumps upward and then falls back to zero.
D) jumps upward and then falls back part of the way.
B
You might also like to view...
Which of the following will reduce consumer expenditures?
A) a decrease in expected future income B) a decrease in interest rates C) a decrease in the price level D) a general increase in housing prices
Which statement best describes what will happen if a poor country with little capital and a rich country with a lot of capital each add a single unit of capital?
a. The rich country will experience a relatively large increase in production, while the poor country will experience a relatively small increase in production. b. The poor country will experience a relatively large increase in production, while the rich country will experience a relatively small increase in production. c. The poor country will experience a relatively small increase in production, and the rich country will experience a relatively small increase in production. d. The poor country will experience a relatively large increase in production, and the rich country will experience a relatively large increase in production.