According to the multiplier-accelerator model, what is investment dependent on?

Show Answers

Consumption depends on anticipated future earningsInvestment is influenced by interest rate levelsInvestment relies on expected future profitsInventory accumulation is affected by interest rates

Explanation

The multiplier-accelerator model posits that investment decisions are driven by the expectation of future profits, making option C the correct choice. Other options confuse consumption or inventory with investment or incorrectly link investment primarily to interest rates.