Question

Real GDP per capita in the U.S. grew from about​ $6,000 in the year 1900 to about​ $51,500 in​ 2016, an average growth rate of​ 1.9%. If the U.S. economy continues to grow at this​ rate, how many years will it take for real GDP per capita to​ double? If the U.S. government is able to stimulate the economy such that real GDP grows at a rate of​ 2.2%, how many fewer years would it take for real GDP per capita to double at this higher​ rate?

Answer 1

Answer:

36.84 years and 31.82 years

Explanation:

In this question ,we applied the rule no 70 which means we get to know the estimated number of years for doubling the real GDP

In the first case, the estimated number of years

= 70 ÷ average  annual growth rate

= 70 ÷ 1.9%

= 36.84 years

In the second case, the estimated number of years

= 70 ÷ average  annual growth rate

= 70 ÷ 2.2%

= 31.82 years