Answer to Question #209385 in Macroeconomics for sane

Question

assume that the economy is at its peak with reference to the flexible accelerator explain the behaviour of business fixed investment

Answer 1

Peak economy is the highest point of economic expansion and business fixed investment is whee a business spends in order to increase its productive capacity.

Flexible accelerator explains the position of time lag and that investment is a function of income. Therefore as income increases investments would increase. Business fixed investment uses this concept to effect and increase in income even at a point where the economg is no longer expanding.