The economy has an annual inflation rate of 3.5%. It will take approximately how many years for the price level to double?

Question

Quizplus · Accepted Answer

The Rule of 72 is a quick and easy way to estimate how long it takes for a price level to double. It states that you divide the number 72 by the annual inflation rate to get the approximate number of years it takes for prices to double.

In this case, 72 divided by 3.5% gives us approximately 20.57 years, which we can round down to 20 years. Therefore, choice B is the best answer.

The Economy Has an Annual Inflation Rate of 3