The economy has an annual inﬂation rate of 3.5 percent. It will take approximately how many years for the price level to double?

Question

Quizplus · Accepted Answer

The rule of 70 states that the number of years it takes for a variable to double is approximately 70 divided by the annual growth rate. Using this rule, we can find that it will take approximately 20 years for the price level to double (70/3.5=20). Therefore, the best choice is B - 20 years.

The Economy Has an Annual Inﬂation Rate of 3