According to the Rule of 70, if a country grows at 2.0 per cent per year instead of 1.5 per cent per year, how years less will it take to double its level of real GDP?

Question

Quizplus · Accepted Answer

The Rule of 70 is a way to estimate the number of years it takes for a variable to double at a constant growth rate. It is calculated as 70 divided by the annual growth rate. For a growth rate of 2.0%, it takes 70 / 2.0 = 35 years to double. For a growth rate of 1.5%, it takes 70 / 1.5 = 46.7 years to double. The difference between these two periods is 46.7 - 35 = 11.7 years, which is approximately 11.6 years.

According to the Rule of 70, If a Country Grows