Problem
1. Write a short essay explaining the logic of the Keynesian theory of the business cycle. Incorporate both the multiplier and accelerator principles into your discussion. Explain how they can interact to generate both rapid expansion and a sharp economic slowdown.
2. What is the value of the multiplier if the MPC = 3/4? If the MPS = 1/10?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.