Question

2) Suppose we have the following information for the country of Ashlee-ville.

Inflation rate = 4%

Unemployment rate = 5%,

Population growth rate = 0.25% per year

Real GDP growth rate = 0.5% per year

How long would it take for the country to double its real GDP?

Group of answer choices

A) 40 years

B) 56 years

C) 70 years

D)140 years

E) Never

3) Suppose for the country of Cerna-ville, we have the following information:

Inflation rate = -2%

Unemployment rate = 10%

Population growth rate = 0.5% per year

Real GDP growth rate = 2.5% per year

How long would it take for the country to double its real GDP per capita?

Group of answer choices

A) 35 years

B) 56 years

C) 70 years

D) 140 years

E) Never

4) For the US in the past few decades, economic growth has come from one source: the growth in technology.

True or False?

Answer 1

According to Rule 70

Number of years to double = (70 / annual growth rate )

Note: Do not convert the annual growth rate which is is percentage form in decimal. For example, if annual growth rate is 10%, then use 10 for calculation not 0.10.

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(2) Real GDP growth rate is 0.5%

Number of years to double the real GDP = (70 / 0.5)

=> Number of year to double the real GDP = 140 years

Answer: Option (D)

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(3) Real GDP per capita = (Real GDP / Population)

Real GDP per capita growth rate = Real GDP growth rate - Population growth rate.

=> Real GDP per capita growth rate = 2.5% - 0.5%

=> Real GDP per capita growth rate = 2%

Number of year to double the real GDP per capita growth rate = (70 / 2)

=> Number of years to double the real GDP per capita growth rate = 35 years.

Answer: Option (A)

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(4) False: For the US in the past few decades, economic growth has come from one source: the growth in technology.

There are also other factors alongwith growth in technology which contributed in the economic growth of US in past few decades