Answer to Question #227805 in Macroeconomics for Boitey

Question

how many years will it take for GDP to double from 40 billion to 80 billion if the growth rate is 0,25% per year

Answer 1

Solution:

To determine how many years, it will take for GDP to double, we use the rule of 70 method, which is a way of establishing the period it takes to double a number based on its growth rate:

 

The rule of 70 formula = $\frac{70}{Annual \;Rate\;of\;Return}$

ARR = 0.25%

= $= \frac{70}{0.25} = 280$ years

 

It will take 280 years for GDP to double from 40 billion to 80 billion if the growth rate is 0.25% per year.