Economics · Macroeconomics
Assertion (A): According to the Accelerator Theory of Investment, when consumption or income increases, investment will also increase. Reason (R): The theory assumes that there is excess capacity in the economy. Select the correct answer from the codes given below:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1(A) is false, but (R) is true.
- 2(A) is true, but (R) is false.✓
- 3Both (A) and (R) are true, but (R) is not the correct explanation of (A).
- 4Both (A) and (R) are true and (R) is the correct explanation of (A).
Correct answer
(A) is true, but (R) is false.
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