Exponential growth implies that: Relatively small differences in growth rates translate into substantial differences in the level of a quantity after many years of growth. Growth rates can only be positive.Growth rates will alternate between positive and negative values in every consecutive period.Relatively large differences in growth rates will translate into small differences in the level of a quantity after many years of growth

Answered: Exponential growth implies that:…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Exponential growth implies that:

Relatively small differences in growth rates translate into substantial differences in the level of a quantity after many years of growth.
Growth rates can only be positive.
Growth rates will alternate between positive and negative values in every consecutive period.
Relatively large differences in growth rates will translate into small differences in the level of a quantity after many years of growth

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The exponential growth is the growth rate pattern that shows the sharper increases in the returns over time. The normal interest rate causes the normal growth pattern in the economy whereas the compounding interest rate causes the interest income to increase sharply as the period becomes longer. This is why the growth rate that returns sharper growth, in the long run, is known as the exponential growth rate. Compounding is a good example that creates exponential growth.

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