Given the annual rate of economic growth, the "rule of 70" allows one to
A) determine the accompanying rate of inﬂation.
B) calculate the size of the GDP gap.
C) calculate the number of years required for real GDP to double.
D) determine the growth rate of per capita GDP.

Question

Quizplus · Accepted Answer

The "rule of 70" is a quick way to estimate how long it will take for a country's real GDP to double based on its annual economic growth rate. To use this rule, divide 70 by the annual growth rate (as a percentage). For example, if a country's annual economic growth rate is 3%, it would take approximately 23.3 years for its GDP to double (70 ÷ 3 = 23.3). Therefore, the correct answer is C, as the rule of 70 is used specifically to calculate the number of years required for real GDP to double.

Given the Annual Rate of Economic Growth, the "Rule of 70