Question

Real per capita GDP in China in 1961 was about $500, but it doubled to about $1000.00 by 1978. a. What was the average annual economic growth rate in China over the 17.00 years from 1961 to 1978? (NOTE: Round this to two places past the decimal point.) % b. Per capita real GDP doubled in China again in only seven years, reaching $2000.00 by 1985.00. What was the average annual economic growth rate between 1978 and 1985.00? (NOTE: Round this to two places past the decimal point.) %

Answer 1

Answer:

a.  Average annual economic growth rate in China over 17 years from 1961 to 1978 is 4.12%

b. The average annual economic growth rate between 1978 and 1985 is 10.00%

Explanation:

a. From rule of 70

The rule of 70 tells us that we can divide 70 by the rate of growth to get the number of years before a variable doubles. Therefore, if we know the number of years that a variable actually did take to double, we can rearrange the rule of 70 to determine the average growth rate, x.

70/x = 17

70/17 = x

x = 4.12%

Average annual economic growth rate in China over 17 years from 1961 to 1978 is 4.12%

b. real per capita GDP doubling in just 7 years, the rule of 70 implies:

70/7 = 10%

The average annual economic growth rate between 1978 and 1985 is 10.00%