Ayushi posted an Question
September 11, 2020 • 01:17 am 30 points
  • UGC NET
  • Economics

0.4 which one of the following is the investment function of samuelson's model of trade cycle? ans 1, =lo +vly,-y-al 2.,=lo + vy, a.,=lo + vy- 4. =lo+vly-y

0.4 Which one of the following is the investment function of Samuelson's model of Trade Cycle? Ans 1, =lo +vlY,-Y-al 2.,=lo + vY, a.,=lo + vY- 4. =lo+vly-Y

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    Nidhi taparia best-answer

    Option 1 is correct according to Samuelson's Multiplier-Accelerator Interaction Business Cycle Model, Investment is a function of Income but it has a time lag of two periods. Such that difference between income in period (t-1) and in period (t-2) determine investment in period t.

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