The compounding of economic growth rates means that
A) a large increase in investment today has little effect on national income over the long run.
B) small changes in sustained growth rates can have a significant impact on national income over several decades.
C) consumers should not save,given the low real returns that compounding produces.
D) a 10% annual rate of return will double an investment in less than 6 years.
E) a 2% annual growth rate of GDP will double national income in 27 years.
Correct Answer:
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Q1: A common measure of a country's level
Q2: Over a long period of time,perhaps many
Q6: A common measure of a country's rate
Q7: If GDP in a richer country grows
Q7: If real income grows at approximately 4%
Q8: Refer to Table 25-1.What is real GDP
Q9: Refer to Table 25-1.What is real GDP
Q10: If real income grows at approximately 2%
Q11: Refer to Table 25-1.What is real GDP
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