Amplification of Investment Booms through the Capital Goods Sector
An investment boom, particularly one driven by new technology, can be amplified throughout the economy. As many firms rush to purchase new machinery and equipment, the producers of these capital goods experience a surge in demand. To meet this new demand, these producers may need to expand their own production facilities, leading to a second round of investment that magnifies the initial boom.
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Ch.3 Aggregate demand and the multiplier model - The Economy 2.0 Macroeconomics @ CORE Econ
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Amplification of Investment Booms through the Capital Goods Sector
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