Teaching JKPSC Lecturership Mock Test Series 2024-25 Business Environment and International Business
The flexible accelerator model, used to determine the speed of capital stock adjustment, operates on the principle that:
1
Investment is completely independent of previous investment decisions.
2
Firms adjust their capital stock instantaneously.
3
Firms plan to close a fraction of the gap between the actual and optimal capital stock in each period.
4
The optimum capital stock is a fixed value.