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.

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2. The case says that Kayem Foods is not meeting its profit targets. Why is it difficult for this firm to make money in this mar

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Companies often set target for themselves. The reasons why it is difficult for this firm to make money is that;

As a result of poor demand for the products
It can be also be like due to the power or prestige gained over the years by the supermarkets is depreciating.
This can be due to the small price margin or the price competition from other manufacturers.
Losses encountered via the issue of Private Label
Poor marketing and advertisement strategy and poor budget allocation for it.

Kayem Foods is a very popular brand. It is known to be a 4th generation family owned business. It has it headquartered in Chelsea, MA.

It is commonly known in the world to be the biggest processed meat company that is found in New England. They are based on natural casing, fully cooked and fresh sausage etc.

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