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Why does a small difference in economic growth result in a large difference in wealth over time?

a) Over time, small growth rates end up turning negative, preventing further growth.
b) The effect of compounding allows growth to build upon previous growth.
c) Over time, small growth rates turn into large growth rates.
d) Governments are more likely to support big countries than small countries.

1 Answer

3 votes
b) The effect of compounding allows growth to build upon previous growth
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User Charles Welton
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