A model for the
business cycle at the
macroeconomic level. The accelerator-multiplier model is cyclical and has three phases. First, the government increases its
expenditures, which increases consumer
income. The increase in income leads consumers to
buy more goods and
services, which increases economic output. The higher output leads to higher
investment in the
economy. As the name implies, it combines the
Keynesian multiplier model with the accelerator model.