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B Com Exam  >  B Com Test  >  Macro Economics  >  Test: The Acceleration Principle - B Com MCQ

The Acceleration Principle - Free MCQ Practice Test with solutions, B Com


MCQ Practice Test & Solutions: Test: The Acceleration Principle (10 Questions)

You can prepare effectively for B Com Macro Economics with this dedicated MCQ Practice Test (available with solutions) on the important topic of "Test: The Acceleration Principle". These 10 questions have been designed by the experts with the latest curriculum of B Com 2026, to help you master the concept.

Test Highlights:

  • - Format: Multiple Choice Questions (MCQ)
  • - Duration: 10 minutes
  • - Number of Questions: 10

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Test: The Acceleration Principle - Question 1
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According to the acceleration principle, what effect does an increase in demand for consumption goods have on the demand for investment goods?

Detailed Solution: Question 1

The acceleration principle states that an increase in demand for consumption goods leads to a larger increase in the demand for investment goods. This is because the need for capital goods, such as machines, which are used to produce consumer goods, increases at a faster rate than the demand for the consumer goods themselves.

Test: The Acceleration Principle - Question 2
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What is the key difference between the multiplier and the accelerator?

Detailed Solution: Question 2

The multiplier shows the effect of changes in investment on income and employment, while the accelerator shows the effect of changes in consumption on investment. Additionally, the multiplier depends on psychological factors like the propensity to consume, while the accelerator depends on the durability of machines.

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Test: The Acceleration Principle - Question 3
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In the context of the acceleration principle, what does the term "accelerator" refer to?

Detailed Solution: Question 3

The term "accelerator" in the context of the acceleration principle refers to an economic concept that shows the changes in investment goods industries as a result of changes in consumption goods industries.

Test: The Acceleration Principle - Question 4
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How is the acceleration coefficient calculated?

Detailed Solution: Question 4

The acceleration coefficient (?) is calculated as ?I/?C, where ?I represents the net change in investment outlays and ?C represents the net change in consumption outlays.

Test: The Acceleration Principle - Question 5
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What does the value of the acceleration coefficient indicate?

Detailed Solution: Question 5

The acceleration coefficient indicates the rate of change in investment that results from changes in consumption. A higher value of the coefficient implies a larger increase in investment for a given change in consumption.

Test: The Acceleration Principle - Question 6
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How does the value of the acceleration coefficient relate to the durability of machines?

Detailed Solution: Question 6

The value of the acceleration coefficient is influenced by the durability of machines. Higher durability leads to a higher value of the coefficient, indicating a greater increase in investment due to changes in consumption.

Test: The Acceleration Principle - Question 7
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In the context of the acceleration principle, what happens to investment during a downward economic swing?

Detailed Solution: Question 7

During a downward economic swing, the value of the accelerator is limited by replacement demand and cannot fall below the amount of depreciation. This means that investment cannot decrease beyond a certain point even if consumption decreases.

Test: The Acceleration Principle - Question 8
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According to the acceleration principle, how does investment respond to changes in output?

Detailed Solution: Question 8

According to the acceleration principle, investment responds to changes in output in a directly proportional manner. An increase in output leads to an increase in investment, and vice versa.

Test: The Acceleration Principle - Question 9
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What is the relationship between excess capacity and investment according to the acceleration principle?

Detailed Solution: Question 9

Excess capacity reduces investment demand according to the acceleration principle. If there is excess capacity, firms may not invest in new capital goods since they can produce more output with existing resources.

Test: The Acceleration Principle - Question 10
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What is the key factor that the acceleration principle emphasizes as a determinant of investment?

Detailed Solution: Question 10

The acceleration principle emphasizes changes in technology and the durability of capital goods as key factors that determine investment. These factors influence the demand for capital goods in response to changes in consumption.

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About this B Com Practice Test

This test contains 10 MCQs on The Acceleration Principle with detailed solutions for each question. It is part of the Macro Economics course on EduRev, designed to align with the current B Com syllabus. Each solution explains not just the correct answer but also gives you an understanding of the topic — not just to attempt the question but also help you prepare for the exam with practice.

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