Why do very small differences in annual growth rates amount to ...

[Garrulous]

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.

[amanda_14]

Answer to Question 1

B

Answer to Question 2

D