$\begin{array}{l}
\begin{array} { l l }
\text { Year } & \text { Real GDP } \
1 & \$ 400 \text { million } \
2 & \$ 425 \text { million }
\end{array}\
\text { Table } 17.2
\end{array}$ Refer to Table 17.2.Using the rule of 72,this economy will double in
A)2.88 years.
B)450 years.
C)11.52 years.
D)6.25 years.

Question

$\begin{array}{l}
\begin{array} { l l } 
\text { Year } & \text { Real GDP } \
1 & \$ 400 \text { million } \
2 & \$ 425 \text { million }
\end{array}\
\text { Table } 17.2
\end{array}$ Refer to Table 17.2.Using the rule of 72,this economy will double in
A)2.88 years.
B)450 years.
C)11.52 years.
D)6.25 years.

Quizplus · Accepted Answer

The rule of 72 is a way to estimate the number of years required to double the GDP at a constant annual growth rate. The growth rate is $(425-400)/400 \times 100 = 6.25\%$. Using the rule of 72, $72/6.25 \approx 11.52$ years.