Small Differences in the Annual Rate of Economic Growth Can

Multiple Choice

Small differences in the annual rate of economic growth can make substantial differences in living standards a few decades later because

A) each year the increase in output is added to a larger base, thus compounding its impact.
B) increases in output create surplus labor, keeping costs low.
C) the more rapid the rate of growth, the higher the rate of inflation.
D) increases in output lead to greater increases in population, lowering overall standards of living.
E) expanding economies use up national resources at a rapid rate and create substantial amounts of pollution.