Multiplier
|
Accelerator
|
(i)
The
multiplier shows the effect of change in investment on income and
consumption.
|
(i)
The
accelerator shows the effect of increase in income and consumption on
investment.
|
(ii)
Multiplier
is a static concept.
|
(ii)
Accelerator
is dynamic concept.
|
(iii)
Multiplier
depends on psychology.
|
(iii)
The
accelerator depends on technical factors.
|
(iv)
It
depends on MPC, MPI. This all are psychological.
|
(iv)
It
depends on the fact that a given amount of capital is required to produce a
given amount of final product.
|
(v)
There
are many classification of multiplier such as investment multiplier,
employment multiplier, tax multiplier etc.
|
(v)
There
is no classification in accelerator.
|
(vi)
The
formula of multiplier is,
|
(vi)
The
formula of accelerator is,
|
09 March 2018
What are the differences between multiplier and accelerator
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