Country A and Country B initially have the same real GDP per capita.Country A experiences no economic growth,while Country B grows at a sustained rate of 5 percent.In 14 years,how will Country A's GDP compare to that of Country B's?

Question

Quizplus · Accepted Answer

Using the Rule of 72, which states that the time it takes for a variable to double is approximately equal to 72 divided by its annual growth rate, we can calculate that it will take approximately 14 years for Country B's GDP per capita to double. Therefore, after 14 years, Country B's GDP per capita will be twice its initial value. On the other hand, Country A experiences no economic growth, so its GDP per capita will remain the same. Therefore, after 14 years, the GDP per capita of Country A will be half that of Country B's.

Country a and Country B Initially Have the Same Real