Question

Pineland and vineland are two nations located in the same region. pineland's real gdp is now growing at a rate of 7% due to aggressive government policies while vineland's real gdp is slowly increasing at a rate of 2%. how quickly will it take for pineland's real gdp to double if growth continues at this rate?

Answer 1

According to the rule of 70 if a sum of money is invested at a given rate of return, then the approximate number of years after which it will be doubled can be found by dividing 70 with the given rate of return. Thus if real rate of GDP is 7%, then the doubling time of the investment is 70/7 years which is 10 years.