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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

A nation's capital goods wear out over time, so a portion of its capital goods become unusable every year. Last year, its residents decided to produce no capital goods. It has experienced no growth in its population or in the amounts of other productive resources during the past year. In addition, the nation's technology and resource productivity have remained unchanged during the past year. Will the nation's economic growth rate for the current year be negative, zero, or positive?

Per capita real GDP grows at a rate of $3$ percent in country $F$ and at a rate of $6$ percent in country $G$ . Both begin with equal levels of per capita real GDP. Use Tablerole="math" localid="1651526847805" $9 - 3$ to determine how much higher per capita real GDP will be in country $G$ after $20$ years. How much higher will real GDP be in country $G$ after $40$ years?

"The largest change is from zero to one." Does this statement have anything to do with relative growth rates in poorer versus richer countries?

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

Suppose that during the next $10$ years, real GDP triples and population doubles in each of the nations in Problem $9 - 4 .$ What will per capita real GDP be in each country after $10$ years have passed?

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