EP ECONOMICS,AP EDITION-CONNECT ACCESS
20th Edition
ISBN: 9780021403455
Author: McConnell
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Chapter 24, Problem 3P
To determine
Rule 70.
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A mathematical approximation called t he rule of 70 tells us that the number of years that it will take something that is growing to double in size is approximately equal to the number 70 divided by its percentage rate of growth. Thus, if Mexico’s real GDP per person is growing at 7 percent per year, it will take about 10 years (= 70 / 7) to double. Apply the rule of 70 to solve the following problem. Real GDP per person in Mexico in 2005 was about $11,000 per person, while it was about $44,000 per person in the United States. If real GDP per person in Mexico grows at the rate of 5 percent per year, about how long will it take Mexico’s real GDP per person to reach the level that the United States was at in 2005? (Hint: How many times would Mexico’s 2005 real GDP per person have to double to reach the United States’ 2005 real GDP per person?)
A mathematical approximation called the rule of 70 tells us that the number of years that it will take something that is growing to
double in size is approximately equal to the number 70 divided by its percentage rate of growth. Thus, If Mexico's real GDP per person
is growing at 7 percent per year, it will take about 10 years (= 70/7) to double. Apply the rule of 70 to solve the following problem. Real
GDP per person in Mexico in 2005 was about $12,000 per person, while it was about $48,000 per person in the United States.
A mathematical approximation called the rule of 70 tells us how long it will take for something to double in size if it grows at a constant
rate. The doubling time is approximately equal to the number 70 divided by the percentage rate of growth. Thus, if Oman's real GDP
per person is growing at 7 percent per year, it will take about 10 years (= 70 ÷ 7) to double. Apply the rule of 70 to solve the following
problem:
Real GDP per person in Oman in 2020 was about $13,000 per person, while it was about $52,000 per person in the United States. If
real GDP per person in Oman grows at the rate of 2 percent per year, about how long will it take Oman's real GDP per person to reach
the level that the United States enjoyed in 2020? (Hint. How many times would Oman's 2020 real GDP per person have to double to
reach the United States' 2020 real GDP per person?)
years
Chapter 24 Solutions
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- Suppose some hypothetical economy has experienced an annual growth rate of 4%. Top economists have identified several policies that will increase the growth rate. In order to convince government officials of the importance of their plan, they intend to compare the number of years it will take for the economy to double, based on different growth rates. Using the rule of 70, determine the number of years it will take the economy to double at each growth rate. Growth Rate (Percent) 4 5 6 Years Required to Double (Nearest whole number of years)arrow_forward16)A mathematical approximation called the rule of 70 tells us that the number of years that it will take something that is growing to double in size is approximately equal to the number 70 divided by its percentage rate of growth. Thus, if Mexico’s real GDP per person is growing at 7 percent per year, it will take about 10 years (= 70/7) to double. Apply the rule of 70 to solve the following problem. Real GDP per person in Mexico in 2005 was about $11,000 per person, while it was about $44,000 per person in the United States. If real GDP per person in Mexico grows at the rate of 4 percent per year, about how long will it take Mexico’s real GDP per person to reach the level that the United States was at in 2005? (Hint: How many times would Mexico’s 2005 real GDP per person have to double to reach the United States’ 2005 real GDP per person?) Instructions: Enter your answer as a whole number.arrow_forwardA mathematical approximation called the rule of 70 tells us how long it will take for something to double in size if it grows at a constant rate. The doubling time is approximately equal to the number 70 divided by the percentage rate of growth. Thus, if Panama's real GDP per person is growing at 7 percent per year, it will take about 10 years ( 70/7) to double. Apply the rule of 70 to solve the following problem: Suppose that real GDP per person in Panama in 2017 was about $13,000 per person, while it was about $52.000 per person in the United States. If real GDP per person in Panama grows at the rate of 2 percent per year, about how long will it take Panama's real GDP per person to reach the level that the United States was at in 2017? (Hint How many times would Panama's 2017 real GDP per person have to double to reach the United States' 2017 real GDP per person?) Instructions: Enter your answer as a whole number. yearsarrow_forward
- Suppose a country has a real GDP per capita of $69,000 and grows at a constant rate for the next 49 years. How much larger (in percentage terms) is this country if its growth rate is 4.13% instead of 3.05% after 49 years of growth? Answer this as a percentage and round your answer to two digits after the decimal without the percentage sign. ex. If you found the rate to be 5.125%, answer 5.13.arrow_forwardGDP per capita in the United States was approximately $63,000 in 2020. Use the growth formula (see below) to answer the following questions: Growth formula: (future value) = (present value) × (1 + r)t present value = this year's GDP per capita future value = GDP per capita in the future r = rate of growth (in decimal form) per year What will GDP per capita be in the year 2025 if it grows each year by 2.5 percent?arrow_forwardIn a rich country A, the gross domestic product 1 per person is r = 53,000 (US dollars). In a poor country B, the GDP per person is p = 7,000. Suppose that the GDP of country A grows by 5% per year, and that an economic miracle in country B begins to propel a growth of 9% per year. Assume these growth rates are constant. 1) Over how many years does the absolute difference in GDP between rich country A and poor country B increase? 2) How many years does it take for the GDP of country B to exceed that of country A? (Justify your answers.)arrow_forward
- A mathematical approximation called the rule of 70 tells us how long it will take for something to double in size if it grows at a constant rate. The doubling time is approximately equal to the number 70 divided by the percentage rate of growth. Thus, if Panama’s real GDP per person is growing at 7 percent per year, it will take about 10 years (= 70/7) to double. Apply the rule of 70 to solve the following problem: Suppose that real GDP per person in Panama in 2017 was about $12,000 per person, while it was about $48,000 per person in the United States. If real GDP per person in Panama grows at the rate of 5 percent per year, about how long will it take Panama’s real GDP per person to reach the level that the United States was at in 2017? (Hint: How many times would Panama’s 2017 real GDP per person have to double to reach the United States’ 2017 real GDP per person?) __________ yearsarrow_forwardSuppose that the GDP of California increases by 8.0% each year. How long will it take for the GDP of California to double? Round your answer to one digit after the decimal. duration for California's GDP to double: Suppose that the GDP of Oregon today is exactly twice what it was 17 years ago. What was the average annual growth for Oregon over this time period? Round your answer to one digit after the decimal. average annual growth for Oregon: years % each yeararrow_forwardRichland's real GDP per person is $30,000, and Poorland's real GDP per person is $15,000. However, Richland's real GDP per person is growing at 1 percent per year, and Poorland's is growing at 3 percent per year. Compare real GDP per person in the two countries after 10 years and after 20 years. Approximately how many years will it take Poorland to catch up to Richland? Instructions: Enter your responses as whole numbers. GDP per person after 10 years. GDP per person Richland GDP per person after 20 years $ Poorland $ $ Poorland will catch up to Richland in (Click to select)years.arrow_forward
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