Economic Growth Is an Exponential Process

Multiple Choice

Economic growth is an exponential process. What does this mean?

A) It means that the returns to huge capital investments made today will diminish at an increasing rate over time.
B) It means that small differences in sustained growth rates have significant effects on a nation's real income over long periods of time.
C) It means that countries must allocate increasing amounts of resources to capital goods to see constant increases in the growth rate of potential output.
D) It means that if a country allocates a fixed amount of resources to capital goods, its potential output will increase at an increasing rate over long periods of time.