If a Country Grows at an Average Rate of 3

question 15

Multiple Choice

If a country grows at an average rate of 3.5 percent per year over a ten year period, what is its compounded growth rate over that time period?

• A) 41 percent
• B) 35 percent
• C) 32.7 percent
• D) 45 percent

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Definitions:

Scarce Goods

Items that are limited in availability relative to the desires or needs of consumers.

Laissez-Faire Economy

Literally from the French: “allow [them] to do.” An economy in which individual people and firms pursue their own self-interest without any central direction or regulation.

Excess Supply

A situation where the quantity of a product offered for sale by producers is greater than the quantity demanded by consumers at a given price.

Equilibrium Price

The price at which the quantity demanded by consumers equals the quantity supplied by producers, resulting in market balance.