ANSWER The rule of 70 states that the number of years it takes for the level of any variable to double is approximately equal to 70 divided by the growth rate. If the level of real GDP doubles in 20 years, the rule of 70 gives 20 = 70 : (growth rate) so that the growth rate equals 70 : 20, which is 3.5 percent per year.
ANSWER
ReplyDeleteThe rule of 70 states that the number of years it takes for the level of any variable to double is approximately equal to 70 divided by the growth rate. If the level of real GDP doubles in 20 years, the rule of 70 gives 20 = 70 : (growth rate) so that the growth rate equals 70 : 20, which is 3.5 percent per year.