Consider the following statements regarding the Multiplier and Accelerator effects:
A) The Multiplier effect magnifies the impact of changes in autonomous spending on the national income.
B) The Accelerator effect magnifies the impact of changes in investment on national income, and is directly related to changes in output.
C) The multiplier is greater when the MPS is higher.
D) The Accelerator effect leads to a less than proportional increase in investment for a given change in output.
Which of the above statements is/are correct?
1
A and B only
2
B and C only
3
A and D only
4
A, B, and C only