Consider an imaginary economy that has been growing at a rate of 6% per year. Government economists have proposed a number of policies to increase the growth rate but first need to convince the president that the policies will pay off. To do so, they want to present a comparison of the number of years it will take for the economy to double, depending on the growth rate.

Using the rule of 70, determine the number of years it will take the economy to double at each growth rate. Growth rate (Percent Years Required to Double (nearest whole number of years) 4 5 6

Question

Bradley Novak

Business

19 October, 18:06

Consider an imaginary economy that has been growing at a rate of 6% per year. Government economists have proposed a number of policies to increase the growth rate but first need to convince the president that the policies will pay off. To do so, they want to present a comparison of the number of years it will take for the economy to double, depending on the growth rate.

Using the rule of 70, determine the number of years it will take the economy to double at each growth rate. Growth rate (Percent Years Required to Double (nearest whole number of years) 4 5 6

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Mckenna · Answer 1

11.67 years

Explanation:

The rule of 70 requires that in determining when the economy growth rate will double its current growth rate, the appropriate thing to do is divide 70 by the current growth rate of 6% per year.

The economy's growth rate of 6% has its percentage ignored when the calculation is carried out.

=70/6 = 11.67

The current economy's growth rate would double in 11.67 years' time