Economics · Business Cycles Theory
Which of the following statements is INCORRECT regarding John Hicks' Theory of Trade Cycles?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Changes in autonomous investment and consumption drive changes in aggregate macroeconomic equilibrium.
- 2The accelerator remains active in all stages, while the multiplier ceases to function during recession.✓
- 3Autonomous investment continues to grow at a constant rate even during economic downturns.
- 4The upper ceiling limit of economic expansion is constrained by full employment.
Correct answer
The accelerator remains active in all stages, while the multiplier ceases to function during recession.
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