7. Interaction between the multiplier and accelerator enhances the potential for economic instability. During expansion, an increase in investment serves to increase consumption, which in tum increases the demand for additional investment. Consumption and investment feed each other, and the economy booms. However, full employment places a ceiling on growth, and eventually the expansion levels off. The accelerator principle explains why, as growth and consumption level off, net investment often declines sharply, plunging the economy toward recession.