The rule of 70 indicates that a 5% annual increase in the potential level of real...

The rule of 70 indicates that a 5% annual increase in the potential level of real GDP would lead to the potential output doubling in _______ years

	a.	6
	b.	12
	c.	14
	d.	20

Expert Solution

Solution:-

GDP would lead to the potential output doubling = 70 / percent increase

= 70 / 5

= 14

The potential level of real GDP would lead to the potential output doubling in 14 years

Rahul Sunny answered 2 years ago

1) According to the rule of 70, if a country's real GDP per capita grows at...

1) According to the rule of 70, if a country's real GDP per capita grows at an annual rate of 2% instead of 3%, it will take _____ for that country to double its level of real GDP per capita. a) 11.67 additional years b)35 additional years C) 3.3 additional years D) 30 additional years --------- 2) In a closed economy, GDP = $10 trillion, Consumption = $6 trillion, and government spending is $2 trillion. Total taxes are $1.5...

This question is about the rule of 70! In recent decades, the real per capita GDP...

This question is about the rule of 70! In recent decades, the real per capita GDP in the fast growing countries such as China ($2444 in 1985; $13043 in 2017), India ($1032 in 1985, $6422 in 2017), South Korea ($6630 in 1985, $36265 in 2017), Singapore ($18711 in 1985, $67138 in 2017), and Taiwan ($12088 in 1985, $43211 in 2017) has risen about around 8 percent per year on average. around 2 percent per year on average. 4 - 6...

20. If the capital stock is ABOVE the Golden Rule level, an increase in the capital...

20. If the capital stock is ABOVE the Golden Rule level, an increase in the capital stock would A raise output less than depreciation B raise output more than depreciation 21. If the capital stock is ABOVE the Golden Rule level, an increase in the capital stock would A cause consumption to fall B cause consumption to rise 22. At the Golden Rule level of capital, A the marginal product of capital per worker equals the depreciation rate B the...

Actual vs potential GDP using differing time periods. Describe the rule of 70. What is the...

Actual vs potential GDP using differing time periods. Describe the rule of 70. What is the is the impact of the rule of seventy on equity investments?

The price level will increase while real GDP decreases when:

The price level will increase while real GDP decreases when: aggregate demand decreases/shifts to the left short-run aggregate supply decreases/shifts to the left short-run aggregate supply increases/shifts to the right aggregate demand increases/shifts to the right

1) Analyse the effects of an increase in the money supply on the level of real...

1) Analyse the effects of an increase in the money supply on the level of real income, the price level, the interest rate and the money wage within the Keynesian system variable price-fixed wage. Compare the effects with those in the variable price-variable money wage model. Why the money wage does not adjust proportionately? What are the reasons? 20 MARKS

An increase in prepaid insurance indicates that

1An increase in prepaid insurance indicates thatainsurance expense for the period exceeded insurance paidbinsurance expense and insurance paid were equalcno insurance expense was recorded during the perioddinsurance paid during the period exceeded insurance expense2Which of the following payroll-related items is paid only by the employee?aState unemployment taxbFederal unemployment tax cUnion duesdFICA tax

Consider the following table for the U.S. Year Potential Real GDP Real GDP Price Level Federal...

Consider the following table for the U.S. Year Potential Real GDP Real GDP Price Level Federal Funds Rate 2006 $15.3 trillion $15.3 trillion 90.1 5.0% 2007 $15.6 trillion $15.6 trillion 92.5 5.0% 2008 $15.9 trillion $15.6 trillion 94.3 1.9% 2009 $16.1 trillion $15.2 trillion 95.0 0.2% 2010 $16.3 trillion $15.6 trillion 96.1 0.2% 2011 $16.5 trillion $15.8 trillion 98.1 0.1% 2012 $16.7 trillion $16.2 trillion 100.0 0.1% 2013 $17.0 trillion $16.5 trillion 101.6 0.1% 2014 $17.3 trillion $16.9 trillion 103.6...

Suppose that an increase in the price level reduces the value of real wealth, which then...

Suppose that an increase in the price level reduces the value of real wealth, which then causes a reduction in consumption but no change in saving. In this case: a. there is no wealth effect. b. there is both an interest rate effect and a wealth effect. c. there is a wealth effect but no interest rate effect. d. there is an interest rate effect but no wealth effect. e. there is no wealth effect and no interest rate effect....

Suppose real output is at the potential level. Further assume that the federal government decides that...

Suppose real output is at the potential level. Further assume that the federal government decides that the current budget deficit is too high and passes a change in policy to eliminate the deficit. Everything else held constant, if the central bank enacts counter-cyclical policy, it will ______real interest rates. If the central bank does nothing, the inflation rate will ______, everything held constant. a. decrease, decrease b. increase, increase c. increase, decrease. d. decrease, increase

Question