Which of the following is true of small changes in productivity growth rates?

A) Small changes in productivity growth rates decrease the productivity of workers in the short run compounding the problem.
B) The effects of small changes in productivity growth rates are compounded over the years leading to large cumulative effects.
C) Small increases in productivity growth rates cause output to fall.
D) The effects of small changes in productivity growth rates are negligible.
E) Small decreases in productivity growth rates cause output to increase.

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Arianna Valentin · Accepted Answer

Final Answer : B, Explanation :  Small changes in productivity growth rates may not seem significant in the short run, but they can compound over time to have large cumulative effects on output and the economy as a whole. This is because small changes in productivity growth rates can impact investment, innovation, and overall economic growth, which all have a snowball effect over time.

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