Assume the economy is growing at a rate of 3%. According to the rule of 70 ____.

Question

Assume the economy is growing at a rate of 3%.  According to the rule of 70 ____.

BlackTom AI · Accepted Answer

First, note that the Rule of 70 is a quick way to estimate how long it takes for a quantity growing at a constant rate to double. The formula is Doubling Time ≈ 70 / growth rate.

Next, with an economy growing at 3% per year, the estimated doubling time would be 70 / 3 ≈ 23.33 years. This means the economy’s size is expected to double in a little over 23 years, not exactly 23 years but very close given the approximation.

In the provided material, the stated answer is: 'the size of the economy will double in 23 years.' While this is a rounded figure, it aligns with the Rule of 70 approximation, acknowledging that the precise figure is about 23.33 years.

However, a potential source of confusion here is that the answer options are not present in the data you provided. Without the alternative choices, we cannot compare to determine which option is deemed correct in a multiple-choice context.

If you were to evaluate likely options, you would look for statements such as: 
- Doubling time ≈ 70 / 3 ≈ 23 years (correct within rounding) 
- Doubling time ≈ 70 / 3.0 = 23.33 years (more precise) 
- Any claim that the doubling time is 30 years or 14 years would be inconsistent with the Rule of 70 at 3% growth.

In summary, the core concept using the Rule of 70 gives a doubling time just over 23 years for a 3% growth rate, which is consistent with the stated answer given, despite the absence of other answer choices to compare against.

ECON 2002.01 SP2025 (25230) Quiz 6

Assume the economy is growing at a rate of 3%. According to the rule of 70 ____.

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