Explain how the multiplier and accelerator effects may, Econometrics

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Explain how the multiplier and accelerator effects may

1. Why is it important to take account of accelerator effects when considering changes in the macro economy? What does the accelerator effect imply for the stability of invest-ment spending over time?

2. Explain how the multiplier and accelerator effects may impact together to lead to fluctuations in national income. What steps might government adopt to reduce economic instability?

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