Consider two scenarios for a nation's economic growth. Scenario A has real GDP growing at an average annual rate of 3.5%; scenario B has an average annual growth of 4.5%. The nation's real GDP would double in about:

Question

Quizplus · Accepted Answer

To calculate the number of years it takes for real GDP to double, we use the rule of 70, which is as follows:

Number of years to double = 70 / Annual growth rate

Using this formula with scenario A (annual growth rate of 3.5%), we get:

Number of years to double = 70 / 3.5 = 20

Using the same formula with scenario B (annual growth rate of 4.5%), we get:

Number of years to double = 70 / 4.5 = 15.6 or approximately 16

Therefore, we can conclude that option B is correct, as real GDP would double in 20 years under scenario A, versus 16 years under scenario B.

Consider Two Scenarios for a Nation's Economic Growth