Question

Country Able and Country Baker initially have the same real GDP per capita. Country Able experiences no economic growth, while Country Baker grows at a sustained rate of 7 percent. In 12 years, Country Baker's GDP will be approximately ___________ that of Country Able.1) triple2) double3) one-half4) one-fourth

Answer 1

2. DOUBLE

Step-by-step explanation:

Using rule 70,

Number of years to double = 70 ÷ annual % growth rate.

Given that,

Annual growth rate for country Baker = 7%

Therefore,

No. Of years to double = 70 / 7

= 10 years

So, in 12 years time, country Baker GDP will be approximately double that of country able seeing it took country Baker 10 years to double current GDP.