Small differences in annual growth rates accumulate into:

Question

Quizplus · Accepted Answer

Small differences in annual growth rates can compound over time and lead to significant differences in GDP. This effect is known as the "power of compounding." For example, a country with an annual growth rate of 2% will have a GDP that is twice the size of a country with an annual growth rate of 1% after 35 years. Therefore, even small differences in growth rates can lead to large differences in GDP.

Small Differences in Annual Growth Rates Accumulate Into