Answer to Question #209554 in Macroeconomics for Olovuyo

Question

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

Answer 1

The flexible accelerator will positively impact the amount of expenditure in equipments and machines given the economy is at its peak creating a favourable conditions for the business to invest. Decrease in the cost of foreign exchange will negatively impact the amount of expenditure. Therefore, the policy of a business that yields the output and profitability is fundamental for the business to expand, grow and develop.