Question

Suppose for the country of Karla-opolis, the inflation rate is 10%, the population growth is 5% per year while the real GDP growth is 5% per year. How long would it take for the country to double its real GDP per capita?

Answer 1

14 years

Step-by-step explanation:

Given that

Inflation rate = 10%

Population growth = 5%

Real GDP growth rate = 5%

So based on Rule 70 we can double the real GDP per capita which is computed below:

= Rule 70 ÷ Real GDP growth rate

= 70 ÷ 5%

= 14 years

In 14 years, the country can double its real GDP per capita

Therefor, we divided the 70 by the real GDP growth rate to know the number of years to double it