The country of Lower Skipjack has been experiencing economic growth of 3.5%. If the growth continues at this rate, how many years will it take for the economy to double in size?

Question

BlackTom AI · Accepted Answer

The question asks how long it would take for the economy to double at a steady growth rate of 3.5% per year.
First, recall the rule of 70 (an approximate method for doubling time): doubling time ≈ 70 divided by the annual growth rate expressed as a percentage.
Option 1: 35 years would correspond to a growth rate of about 70/35 = 2%. Since the given rate is 3.5%, 35 years is too long for a doubling.
Option 2: 245 years would imply 70/245 ≈ 0.2857% annual growth, which is far smaller than 3.5%. This is inconsistent with the stated rate.
Option 3: 20 years aligns with the rule of 70 as 70/3.5 = 20. A growth rate of 3.5% indeed yields a doubling time close to 20 years, so this option matches the given information.
Option 4: 70 years would require a growth rate of about 1% per year (70/70 = 1%). Since the rate is 3.5%, this option underestimates the speed of growth and results in a longer doubling time than actually would occur.
In summary, each incorrect option corresponds to a different implied growth rate when applying the rule of 70, and only the one with 20 years is consistent with a 3.5% growth rate. The calculation framework here hinges on converting growth rate into a doubling time using the 70-percentage-point rule, which is a common heuristic in economics and finance.

ECON 2002.01 SP2025 (25230) Final Exam

The country of Lower Skipjack has been experiencing economic growth of 3.5%. If the growth continues at this rate, how many years will it take for the economy to double in size?

View Explanation

Log in for full answers

Similar Questions

If per capita real income grows by 2 percent per year, then it will double in approximately 20 years.

If a nation's real GDP is growing by 5 percent per year, its real GDP will double in approximately

Suppose average GDP growth rate is 5%. At this rate, how many years will it take to double?

36. The economy has an annual inflation rate of 3.5 percent. It will take approximately how many years for the price level to double? A. 10 years B. 20 years C. 25 years D. 30 years

Suppose the real GDP growth rate in Germany consistently averages 3.5% per year. Approximately how many years will it take for real GDP in Germany to double?

Suppose the real GDP growth rate in Germany consistently averages 3.5% per year. Approximately how many years will it take for real GDP in Germany to double?

Suppose the real GDP growth rate in Germany consistently averages 3.5% per year. Approximately how many years will it take for real GDP in Germany to double?

More Practical Tools for International Students

Exam Browser Assistant

Stylized Writing Assistant

Plagiarism Checker Assistant

Citation Assistant

In-Class Translation Assistant

Class Notes Assistant

Quiz Search Assistant

Past Exam Questions by School

Smart Practice Assistant

Adaptive Practice

Making Your Study Simpler