Question

A country aims to double real GDP per capita in the next 25 years. If the rate of population growth in the country is 1.5% per year then at approximately what rate does real GDP need to grow to achieve this goal

Answer 1

Answer: 4.3%

Step-by-step explanation:

Real GDP growth rate = GDP per Capita growth rate + Population growth rate

GDP per capita growth rate:

One can use the rule of 70 to calculate the length of time it would take something to double:

Years = 70 / rate

rate * years = 70

Rate = 70 / years

= 70/25

= 2.8%

Real GDP growth rate = 2.8% + 1.5%

= 4.3%