/*! This file is auto-generated */ .wp-block-button__link{color:#fff;background-color:#32373c;border-radius:9999px;box-shadow:none;text-decoration:none;padding:calc(.667em + 2px) calc(1.333em + 2px);font-size:1.125em}.wp-block-file__button{background:#32373c;color:#fff;text-decoration:none} Q1. If real GDP grows at 7 percent p... [FREE SOLUTION] | 91影视

91影视

Log out

Learning Materials

Features

Discover

Chapter 8: Q1. (page 173)

If real GDP grows at 7 percent per year, then real GDP will double in approximately ________ years.

a. 70

b. 14

c. 10

d. 7

Short Answer

Expert verified

Option (c) is correct. The real GDP will double in approximately 10 years.

Step by step solution

01

Step 1. Explaining the concept “rule of 70” to determine the required number of years for an economy to double its size

The economists use the 鈥渞ule of 70鈥� to evaluate the approximate number of years an economy will take to double its size. The mathematical expression under the rule of 70 is given below:Approximateno.ofyrsrequiredtodoubletherealGDP=70Annualpercentagerateofgrowth

02

Step 2. Calculating annual growth rates

The required annual growth rate for a country to double its output can be calculated using the 鈥渞ule of 70鈥� formula.

Annual percentage rate of growth = 70/Approximate number of years required to double the GDP

The required annual percentage growth for a country to double its output in 7 years is:

Annualpercentagerateofgrowth=707=10percent

The required annual growth rate is 10 percent. Hence, option (c) is correct.

Unlock Step-by-Step Solutions & Ace Your Exams!

  • Full Textbook Solutions

    Get detailed explanations and key concepts

  • Unlimited Al creation

    Al flashcards, explanations, exams and more...

  • Ads-free access

    To over 500 millions flashcards

  • Money-back guarantee

    We refund you if you fail your exam.

Over 30 million students worldwide already upgrade their learning with 91影视!

One App. One Place for Learning.

All the tools & learning materials you need for study success - in one app.

Get started for free

Most popular questions from this chapter

Suppose that just by doubling the amount of output that it produces each year, a firm鈥檚 per-unit production costs fall by 30 percent. This result is an example of:

a. economies of scale.

b. improved resource allocation.

c. technological advance.

d. the demand factor.

Relate each of the following to the 1995鈥�2010 increase in the trend rate of productivity growth:

a. information technology

b. increasing returns

c. network effects

d. global competition

The per-unit cost of an item is its average total cost (= total cost/quantity). Suppose that a new smartphone app costs \(100,000 to develop and only \)0.50 per unit to deliver to each smartphone customer. What will be the per-unit cost of the app if it sells 100 units? 1,000 units? 1 million units?

Identify the following arguments about economic growth as either anti-growth or pro-growth.

a. Growth means worker burnout and frantic schedules.

b. Rising incomes allow people to buy more education, medical care, and recreation.

c. Earth has only finite amounts of natural resources.

d. Even the richest countries still have poverty, homelessness, and discrimination.

e. Richer countries spend more money protecting the environment.

f. Natural resource prices have fallen rather than increased over time.

Suppose that Alpha and Omega have identically sized working-age populations but that total annual hours of work are much greater in Alpha than in Omega. Provide two possible reasons for this difference.
See all solutions

Recommended explanations on Economics Textbooks

Taxation Economics

Read Explanation
View all explanations

What do you think about this solution?

We value your feedback to improve our textbook solutions.

Study anywhere. Anytime. Across all devices.