All categories

3 years ago

Why does a small difference in economic growth result in a large difference in wealth over time?

Business

1 answer:

larisa [96]3 years ago

7 0

Answer:

The correct answer is the option C: Because the effect of compounding allows growth to build upon previous growth.

Explanation:

To begin with, the term of <em>"Compounding"</em> in economics refers to the situation in which an assets' earnings are reinvested to generate more additional earnings over the pass of time and therefore that in an economy when there is a small growth the investors take advantage of the effect that the compounding has over the situation and use it in order to generate more earning in the future and that is why that the the effect of compounding allows growth to build only upon previous growth.

You might be interested in

Identify which of the factors below are better short-range predictors and which are better long-range predictors of movements in

alina1380 [7]

Answer:

Short range predictors:

c. Nominal interest rate differential

d. Psychological effects

e. Investor expectations

f. Bandwagon effect

Long range predictors:

a. Relative monetary growth

b. Relative inflation rates

Explanation:

Nominal rate, the real rate, and inflation. long term predictors of an economic theory in which a relationship between inflation, nominal interest rate and real interest rate is identified. It defines that real interest rate is equal to inflation minus nominal interest rate.

Bandwagon effect is a short range predictor because it is effect of uptake when people follow others. They take decisions what other do and its their belief that other people have taken the right decision so we too. This is just a short term hop based on beliefs regardless of any underlying evidence.

8 0

3 years ago

Discuss the rationale of organizing an industrial strike in resolving employee dispute with the state, focusing on the detriment

WINSTONCH [101]

Answe

Explanation:

Discuss the rationale of organizing an industrial strike in resolving employee dispute with the state, focusing on the detrimental effects strikes has on various stakeholders in an economy

6 0

3 years ago

You are trying to decide whether to take a vacation. Most of the costs of the vacation (airfare, hotel, and forgone wages) are m

masha68 [24]

Answer:

Which of the following is true if you decide to take the vacation?

(B) The benefits of going on the vacation exceed the benefits you would obtain from the new computer.

Explanation:

The benefits of going on the vacation exceed the benefits you would obtain from the new computer.

The cost of going on the vacation is less than the cost of the computer.

4 0

3 years ago

What do investors use the income statements of organizations for?

Ivenika [448]

Answer:

Investors use income statements to determine the profitability of a company over time. ... This is the amount that a company would pay shareholders, per share, if the company paid out all of its net income as dividends.

Explanation:

5 0

3 years ago

J. Morgan and M. Halsted are partners who share income and loss in a 3:1 ratio. After several unprofitable periods, the two part

Elina [12.6K]

Answer:

cash 110,000 debit

land 100,000 credit

gain at disposal 10,000 credit

--to reocrd teh sale of land--

accounts payable 80,000 debit

cash 80,000 credit

--to record the payment of liabilities--

gain at disposal 10,000 debit

Morgan 7,500 credit

Halsted 2,500 credit

--to distribute the gain from sale--

Morgan 22,500

Haslted 7,500

Cash 30,000

--to liquidate the partnership--

Explanation:

ratio 3:1 (3+1=4)

Morgan 15000 share of 3/4 = 75%

Halsted 5000 share of 1/4 = 25%

there is gain of 10,000 in the sale distribute as follow

Morgan 10,000 x 75% = 7,500

Halsted 10,000 x 75% = 2,500

Now we close the account against cash

8 0

3 years ago