The Reason That Differences in Economic Growth Rates Are Important

question 256

Multiple Choice

The reason that differences in economic growth rates are important in the long run is that

• A) growth compounds over time.
• B) population naturally shrinks in most countries.
• C) real GDP usually drops when adjusted for inflation.
• D) nominal GDP typically increases faster than real GDP.

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Definitions:

World Bank

An organization established by the industrialized nations in 1946 to loan money to underdeveloped and developing countries; formally known as the International Bank for Reconstruction and Development.

Underdeveloped

Refers to countries or regions with low levels of industrialization, infrastructure, and income per capita compared to other countries.

Developing Countries

Nations with a lower living standard, undeveloped industrial base, and low Human Development Index relative to other countries.