Which of the Following Is Implied by the Compounding of Economic

question 45

Multiple Choice

Which of the following is implied by the compounding of economic growth rates?

• 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.

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Definitions:

Rotary Flow

Fluid movement such as that produced by a paddle wheel in water, or propeller in air, that results in centrifugal force. See rotary oil flow.

Oil Flow

The movement of oil through an engine or system to lubricate, cool, and clean internal components.

Mechanical Connection

A physical link between two or more parts that allows for transfer of force or motion.

Transmission Bearing

A type of bearing that supports the rotational movements within a transmission system, ensuring smooth operation.