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 constantrate. The doubling time is approximately equal to the number 70 divided by the percentage rate of growth. Thus, if Oman's real GDPper 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 followingproblem: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. Ifreal 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 reachthe level that the United States enjoyed in 2020? (Hint. How many times would Oman's 2020 real GDP per person have to double toreach the United States' 2020 real GDP per person?)years

Real GDP per person of Oman in 2020 = $13,000Real GDP per person in US in 2020 = $52,000 To reach…

Answered: A mathematical approximation called the…

ECON MACRO

5th Edition

ISBN:9781337000529

Author:William A. McEachern

Publisher:William A. McEachern

Chapter8: Productivity And Growth

Section: Chapter Questions

Problem 2.4P

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A mathematical approximation called t he rule of 70 tells us that the number of years that it will take something that is growing to double in size is approximately equal to the number 70 divided by its percentage rate of growth. Thus, if Mexico’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 Mexico in 2005 was about $11,000 per person, while it was about $44,000 per person in the United States. If real GDP per person in Mexico grows at the rate of 5 percent per year, about how long will it take Mexico’s real GDP per person to reach the level that the United States was at in 2005? (Hint: How many times would Mexico’s 2005 real GDP per person have to double to reach the United States’ 2005 real GDP per person?)
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Suppose China’s GDP is growing by 7% a year and its population grows by 1% a year. Also suppose that US GDP grows by 3% a year and its population grows by 1% a year, and that in 2019 US GDP is 1.5 times China’s while US population is one quarter of China’s. If these growth rates continue By what year will China’s GDP double? Its population? Its per capita GDP?In what year will China’s GDP equal US GDP?In what year will China’s GDP per capita equal US GDP per capita?
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Suppose a country has a real GDP per capita of $69,000 and grows at a constant rate for the next 49 years. How much larger (in percentage terms) is this country if its growth rate is 4.13% instead of 3.05% after 49 years of growth? Answer this as a percentage and round your answer to two digits after the decimal without the percentage sign. ex. If you found the rate to be 5.125%, answer 5.13.

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