Small differences in annual growth rates of real GDP generate large differences in real GDP over time because of the:
A)importance of average labor productivity.
B)power of compound interest.
C)diminishing returns to capital.
D)limits of economic growth.

Question

Quizplus · Accepted Answer

Compound interest pays interest on previously earned interest, so small differences in growth rates expand into big differences over time.

Small Differences in Annual Growth Rates of Real GDP Generate