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Chapter 9: 20 - Problems (page 211)

Consider Figure 9-8. According to rule of 70, about how many years would have been required for US per capita real GDP to double if it had remained at the average level observed between 1961 and 1980 ? Between 2001 and 2017 .?

Short Answer

Expert verified

Doubling time as per $1961 - 80$ growth rate = $26.9$ years

Doubling time as per $1981 - 2000$ growth rate = $30.43$ years

Step by step solution

01

Rule of 70 basic

The rule of 70 states that, time taken for an economy to double its GDP =

$70 / G D P g r o w t h r a t e$

02

Numeric Solution

Growth rate between $1961 t o 1980 = 2.6 %$

Growth rate between $1981 t o 2000 = 2.3 %$

GDP doubling time as per $1961 t o 1980 g r o w t h r a t e = 70 / 2.6 = 26.9$ years

GDP doubling time as per $1981 t o 2000 g r o w t h r a t e = 70 / 2.3 = 30.43$ years

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Most popular questions from this chapter

Consider Figure 9-7, and suppose that we round the rate of growth of per capita real GDP experienced in the European Union between 2001 and 2017 to the nearest full percentage point. Based on the information in Table 9-3, by what percentage will per capita real GDP increase over the next 30 years if the economic growth rate remains at this rounded level?

Based on data in Table 9-1 and the rule of 70 , if U.S. per capita real GDP continues to grow at the average rate it has experienced since 1990 , about how many years will be required for it to double?

Consider the following table displaying annual growth rates for nations $X, Y$ and $Z$ , each of which entered $2017$ with real per capita GDP equal to $$ 20, 000$ .

a. Which nation most likely experienced a sizable earthquake in late $2017$ that destroyed a significant portion of its stock of capital goods, but was followed by speedy investments in rebuilding the nation's capital stock? What is this nation's per capita real GDP at the end of $2020$ , rounded to the nearest dollar?

b. Which nation most likely adopted policies in 2017 that encouraged a gradual shift in production from capital goods to consumption goods? What is this nation's per capita real GDP at the end of $2020$ , rounded to the nearest dollar?

c. Which nation most likely adopted policies in $2017$ that encouraged a quick shift in production from consumption goods to capital goods? What is this nation's per capita real GDP at the end ofrole="math" localid="1651525075599" $2020$ , rounded to the nearest dollar?

Describe how immigration and property rights influence economic growth

Why does it appear to be difficult to assess whether there is a direct or inverse relationship between inequality and economic growth?

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