
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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Question
![**Problem Statement:**
*If real GDP grows at an annual rate of 1.19%, then we can expect real GDP to double in approximately how many years? Enter a number rounded to two decimal places.*
**Guidance for Solution:**
To solve this problem, you can use the Rule of 70, a common method for estimating the number of years required to double an investment or a value at a consistent annual growth rate.
**Rule of 70 Formula:**
\[ \text{Doubling Time (years)} = \frac{70}{\text{Growth Rate (\%)}} \]
**Example Calculation:**
Given a growth rate of 1.19%, the estimated doubling time of the real GDP would be:
\[ \frac{70}{1.19} \approx 58.82 \text{ years} \]
Therefore, it would take approximately 58.82 years for the real GDP to double at an annual growth rate of 1.19%.](https://content.bartleby.com/qna-images/question/08bf1d36-ff86-4b14-8fdf-4eec06b54af0/c2ff07ad-6a97-4a60-b39a-db7588e916ee/g6ndu9k_thumbnail.jpeg)
Transcribed Image Text:**Problem Statement:**
*If real GDP grows at an annual rate of 1.19%, then we can expect real GDP to double in approximately how many years? Enter a number rounded to two decimal places.*
**Guidance for Solution:**
To solve this problem, you can use the Rule of 70, a common method for estimating the number of years required to double an investment or a value at a consistent annual growth rate.
**Rule of 70 Formula:**
\[ \text{Doubling Time (years)} = \frac{70}{\text{Growth Rate (\%)}} \]
**Example Calculation:**
Given a growth rate of 1.19%, the estimated doubling time of the real GDP would be:
\[ \frac{70}{1.19} \approx 58.82 \text{ years} \]
Therefore, it would take approximately 58.82 years for the real GDP to double at an annual growth rate of 1.19%.
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