If the annual inflation rate is 7 percent,then the price level will double in ten years.

Name: If the annual inflation rate is 7 percent,then the price level will double in ten years.
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Question

Quizplus · Accepted Answer

The rule of 72 states that the number of years it takes for an investment to double is approximately 72 divided by the annual interest rate. In this case, the annual inflation rate is 7 percent, so it will take approximately 72 / 7 = 10 years for the price level to double.

If the Annual Inflation Rate Is 7 Percent,then the Price