Ayushi posted an Question
August 11, 2020 • 22:32 pm 30 points
  • UGC NET
  • Economics

56. which formulation correctly represents the net investment as per the flexible accelerator theory of investment ? here i=net investment, y=output, k= stock o

56. Which formulation correctly represents the net investment as per the flexible accelerator theory of investment ? Here I=Net Investment, Y=Output, K= Stock of Capital, 8 Accelerator Coeficient, 8 Rate of depreciation and t time (0) 4-(-) (2) , =9(-Y)+6 K (3) ,=B(Y-Ya) (4) Both (1) &(2)

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    Nidhi taparia best-answer

    Hi! So I'm not at all sure about this question, but I'm still going to give it a try, hoping it and some information that I know, would be of some help to you. So the flexible accelerator model is basically an upgrade of the simple accelerator one. The most popular approach to it was defined by Koyck. The first option is ruled out because that's the simple accelerator principle. Consequently, option four is also ruled out. That leaves us with options 2 and 3. Option 3 doesn't seem right because it basically shows that there is a time lag of 2 years im determining investment. So my final answer would be option (2). But I would advise checking with a faculty or professor to be absolutely sure.

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