A small economy has a current real GDP per capita level of $2,000 and a GDP growth rate of 2 percent. Use the Rule of 70 to estimate how long it would take for this economy to quadruple its GDP per capita.

Question

Quizplus · Accepted Answer

The Rule of 70 estimates the doubling time by dividing 70 by the growth rate. To quadruple, the GDP per capita must double twice. With a 2% growth rate, it takes 35 years to double (70/2), so it takes 70 years to quadruple (35 years x 2).

A Small Economy Has a Current Real GDP Per Capita