ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Because b = 1.16 is greater than 1, it indicates exponential growth. The rate of growth is found by solving 1+r = 1.16 to get r = 0.16, which leads to 16% growth.

Detailed explanation-2: -The common ratio refers to the rate of change in an exponential function. In the form given above, the common ratio is “b". For example, in the function f(x) = 2*3^x, the initial value is 2 and the common ratio is 3.

Detailed explanation-3: -It is called the common ratio because it is the same to each number, or common, and it also is the ratio between two consecutive numbers in the sequence. To determine the common ratio, you can just divide each number from the number preceding it in the sequence.

Detailed explanation-4: -To identify a constant ratio, divide a term by the preceding (previous) term. If the ratio between all terms is the same (constant) it is an exponential function.

Detailed explanation-5: -. In an exponential function of the form y = bx, ‘b’ represents the common ratio. Decay Curve A decay curve is the name given to the graph of an exponential function in which the common ratio is such that 0 < b < 1. The graph is decreasing since the value of the function falls as the value of ‘x’ increases.