A change in the growth rate of a country of one percentage point annually has
A) a large impact on the economy in the current year, but not in the future.
B) a large impact in the future due to compounding.
C) a small impact in the current year, and smaller impact in the future because of compounding.
D) very little impact on the economy of a country.
Question 2
Say's law explains
A) how long-run real Gross Domestic Product (GDP) stability is achieved in the Keynesian model.
B) why economies experience business cycles.
C) how the economy can go into recession.
D) how long-term real Gross Domestic Product (GDP) stability is achieved in the classical model.
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