The Capitalist Economic System Is Predicated on a Continually Increased

question 14

Multiple Choice

The capitalist economic system is predicated on a continually increased consumption of resources to produce growth. As such, the very principle of a capitalist economy is

• A) irrational.
• B) unsustainable.
• C) inventive.
• D) constructive.

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Definitions:

Compounding

The process of accumulating interest in an investment over time to earn more interest.

Effective Annual Rate

The annualized rate of interest on a loan or financial product, adjusted for the effects of compounding.

Continuous Compounding

A mathematical approach where interest earnings are immediately reinvested to generate additional earnings continuously.

Stated Rate

The annual interest rate stated on a financial instrument, such as a loan or bond, not adjusting for compounding or fees.