Why Do Very Small Differences in Annual Growth Rates Amount

question 202

Multiple Choice

Why do very small differences in annual growth rates amount to big differences in the degree of long-term economic growth?

• A) Because the faster-growing countries gain a political advantage over poorer countries, and use that advantage for their economic gain.
• B) Because the annual growth rate is compounded over time.
• C) Because the slower-growing countries save too much.
• D) Because the slower-growing countries don't export enough.

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