Suppose per capita real GDP grows by 3.5% per year. Based on the Rule of 70, approximately how many years will it take for the level of per capita real GDP to double (i.e., increase by 100%)?
A)3.5 years
B)10 years
C)20 years
D)35 years

Question

Quizplus · Accepted Answer

The Rule of 70 states that to find the number of years it takes for a variable to double, divide 70 by the annual growth rate as a percentage. In this case, 70 divided by 3.5 equals 20, so it will take approximately 20 years for per capita real GDP to double. Therefore, the best choice is C) 20 years.

Suppose Per Capita Real GDP Grows by 3