Answer to Question #211483 in Macroeconomics for Parvinjinaa

Question

In the last century, Tunisia’s Gross Domestic Product (GDP) has grown rapidly

on average 5% per annum. However, as a result of the political, economic and geopolitical turmoil faced, the economic situation of the country has been affected since 2009. GDP per capita in 2009 was USD4130. While in 2017, GDP per capita Tunisia is USD3491.

In a situation that remains the same, how many years will Tunisia be able to

doubling the per capita GDP achieved in 2009?

Answer 1

The growth rate of Tunisia's GDP is 5%. To find the number of years in which the per capita GDP of Tunisia would double, we would use the rule of 70. The formula for rule of 70 is as follows:

Number of years required to double per capita GDP$=\frac{70}{annual \space growth \space rate}$

On substituting the values, we get

Number of years required to double Tunisia's 2009 per capita GDP $={70}{5}=14$

Thus, Tunisia would be able to double the per capita GDP achieved in 2009 in 14 years.