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A Country's economic performance is determined by consumption and investment. interaction between these.?


A Country's economic performance is determined by consumption and investment. What is the interaction between these two factors in (i) the short run and (ii) the long run? In this context, discuess the multiplier and the accelerator.

Not sure how in detail you want to go, and I'm open to correction: Both will increase the multiplier as they are both injections into the economy. The is a positive interaction between the two as they are both affected by income- if income increases so to do both of these.

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