If real GDP grows at an average annual rate of 2.0 percent instead of 3.5 percent, then it would take
about 35 years-instead of 20 years-for real GDP to double.

Question

Quizplus · Accepted Answer

This is true because the rule of 70 states that it takes approximately 70 divided by the annual growth rate (in percent) for a variable to double. Using this rule, we can see that if real GDP grows at an annual rate of 2%, it would take approximately 35 years for it to double (70/2 = 35), while if it grows at an annual rate of 3.5%, it would take approximately 20 years for it to double (70/3.5 = 20).

If Real GDP Grows at an Average Annual Rate of 2.0