A mathematical approximation called the rule of 70 tells us how long it will take for something to double in size if it grows at a constant rate. The doubling time is approximately equal to the number 70 divided by the percentage rate of growth. Thus, if Oman's real GDP per person is growing at 7 percent per year, it will take about 10 years (= 70 ÷ 7) to double. Apply the rule of 70 to solve the following problem: Real GDP per person in Oman in 2020 was about $13,000 per person, while it was about $52,000 per person in the United States. If real GDP per person in Oman grows at the rate of 2 percent per year, about how long will it take Oman's real GDP per person to reach the level that the United States enjoyed in 2020? (Hint. How many times would Oman's 2020 real GDP per person have to double to reach the United States' 2020 real GDP per person?) years
A mathematical approximation called the rule of 70 tells us how long it will take for something to double in size if it grows at a constant rate. The doubling time is approximately equal to the number 70 divided by the percentage rate of growth. Thus, if Oman's real GDP per person is growing at 7 percent per year, it will take about 10 years (= 70 ÷ 7) to double. Apply the rule of 70 to solve the following problem: Real GDP per person in Oman in 2020 was about $13,000 per person, while it was about $52,000 per person in the United States. If real GDP per person in Oman grows at the rate of 2 percent per year, about how long will it take Oman's real GDP per person to reach the level that the United States enjoyed in 2020? (Hint. How many times would Oman's 2020 real GDP per person have to double to reach the United States' 2020 real GDP per person?) years
Chapter8: Productivity And Growth
Section: Chapter Questions
Problem 2.4P
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Transcribed Image Text:A mathematical approximation called the rule of 70 tells us how long it will take for something to double in size if it grows at a constant
rate. The doubling time is approximately equal to the number 70 divided by the percentage rate of growth. Thus, if Oman's real GDP
per person is growing at 7 percent per year, it will take about 10 years (= 70 ÷ 7) to double. Apply the rule of 70 to solve the following
problem:
Real GDP per person in Oman in 2020 was about $13,000 per person, while it was about $52,000 per person in the United States. If
real GDP per person in Oman grows at the rate of 2 percent per year, about how long will it take Oman's real GDP per person to reach
the level that the United States enjoyed in 2020? (Hint. How many times would Oman's 2020 real GDP per person have to double to
reach the United States' 2020 real GDP per person?)
years
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