Using the rule of 72,determine how long it would take for real GDP to double if it grew at a constant growth rate of 4 percent.
A)4 years.
B)18 years.
C)72 years.

Question

Quizplus · Accepted Answer

The rule of 72 states that the time it takes for an investment to double can be calculated by dividing the number 72 by the annual growth rate. In this case, dividing 72 by 4 gives us 18, which means it would take 18 years for real GDP to double at a constant growth rate of 4 percent. Therefore, the answer is B.

Using the Rule of 72,determine How Long It Would Take