Why do very small differences in annual growth rates amount to big differences in the degree of long-term economic growth?
A) because the slower-growing countries save too much
B) because the annual growth rate is compounded over time
C) because the faster-growing countries gain a political advantage over poorer countries, and use that advantage for their economic gain
D) because the slower-growing countries don't export enough
Question 2
In the classical model, an increase in aggregate demand will cause
A) an increase in actual output, or Gross Domestic Product (GDP).
B) a decrease in actual output, or Gross Domestic Product (GDP).
C) a decrease in price level.
D) an increase in price level.
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