Accelerator Principle
the notion that an increase or reduction in consumer demand will affect several layers of demand in organisational markets; for example, an increase in consumer demand for soft drinks will will lead to an increased demand by retailers for soft drinks, an increased demand by soft drink bottlers for aluminium cans, an increased demand by aluminium can manufacturers for aluminium sheet, an increased demand by aluminium sheet manufacturers for aluminium ore, and so on. See Derived Demand. | ||||
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Accelerator Principle definition was found in categories: Business & Finance(1) Encyclopedia(1)
Accelerator Principle Definition from Business & Finance Dictionaries & Glossaries
| Raynet Business & Marketing Glossary |
Accelerator Principle
economic's term; relatively small change in demand for consumer goods resulting in a substantial change in demand for capital to supply these goods (see the business cycle).
economic's term; relatively small change in demand for consumer goods resulting in a substantial change in demand for capital to supply these goods (see the business cycle).
Accelerator Principle Definition from Encyclopedia Dictionaries & Glossaries
| Wikipedia English - The Free Encyclopedia |
Accelerator effect
The accelerator effect in economics refers to a positive effect on private fixed investment of the growth of the market economy (measured e.g. by Gross Domestic Product). Rising GDP (an economic boom or prosperity) implies that businesses in general see rising profits, increased sales and cash flow, and greater use of existing capacity. This usually implies that profit expectations and business confidence rise, encouraging businesses to build more factories and other buildings and to install more machinery. (This expenditure is called fixed investment.) This may lead to further growth of the economy through the stimulation of consumer incomes and purchases, i.e., via the multiplier effect.
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