Explain importance of small difference in the rate of growth

Reference no: EM13177774

Consider the case of two countries that start with equal levels of GDP. The growth rate of the first country is 3% while the growth rate of the second country is 4%. After 25 years, the level of GDP in the second country is more than 25% larger than that of the first country. Why? And what does this show of the importance of small differences in the rate of growth?

Reference no: EM13177774

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