Q: Which formula correctly represents the Rule of 70 for estimating the doubling time of GDP?

$$Doubling\ Time = \frac{70}{\text{Annual\ Growth\ Rate\ (\%)} }$$

Question 1

Which of the following best describes economic growth in macroeconomics?

Accepted Answer

An outward shift of the production possibilities curve, reflecting increases in per capita real GDP.

Question 2

India’s real GDP is more than three times that of Italy, but India is considered relatively poor compared to Italy. What explains this difference?

Accepted Answer

India’s population is much larger, so its per capita real GDP is much lower.

Question 3

Suppose Canada’s per capita real GDP grows at an average annual rate of 1.1%. Using the Rule of 70, approximately how many years will it take for Canada’s per capita real GDP to double?

Accepted Answer

64 years

Question 4

If a country’s per capita real GDP grows at 5% per year, how long will it take for its GDP to double according to the Rule of 70?

Accepted Answer

14 years

Question 5

Which formula correctly represents the Rule of 70 for estimating the doubling time of GDP?

Accepted Answer

$$Doubling\ Time = \frac{70}{	ext{Annual\ Growth\ Rate\ (\%)} }$$

Question 6

Why do small differences in economic growth rates matter for a nation’s long-term development?

Accepted Answer

Compounding causes small differences to result in large changes in living standards over time.

Question 7

Which of the following is a fundamental determinant of economic growth according to new growth theory?

Accepted Answer

Knowledge, innovation, and technology.

Question 8

How do patents contribute to economic growth?

Accepted Answer

They provide inventors exclusive rights, encouraging research and development.

Question 9

Which of the following best explains the relationship between saving and future consumption?

Accepted Answer

Saving allows for more investment, which can increase future consumption.

Question 10

A country invests heavily in education and human capital. What is the likely long-term effect on its economic growth?

Accepted Answer

It will likely experience higher economic growth and improved living standards.

Question 11

Which of the following is NOT considered a key factor in economic development?

Accepted Answer

Protecting old industries from competition.

Question 12

How does immigration impact economic growth in Canada according to studies?

Accepted Answer

It adds labour resources and increases human capital, contributing to growth.

Question 13

Which of the following is a direct benefit of economic growth?

Accepted Answer

Improved health and longer lives.

Question 14

If a country’s real GDP per capita increases from $$20,000 to 40$$,000 over 35 years, what was its average annual growth rate? (Use the Rule of 70)

Accepted Answer

2%

Question 15

Which of the following best describes the concept of productivity in macroeconomics?

Accepted Answer

The total output produced by all workers divided by the number of workers or labour hours.

Question 16

According to new growth theory, what is the role of ideas and knowledge in economic growth?

Accepted Answer

Economic growth can continue as long as new ideas are generated.

Question 17

Which stage of development is characterized by a shift from agriculture to manufacturing?

Accepted Answer

Manufacturing stage.

Question 18

What is the primary goal of development economics?

Accepted Answer

To analyze why some countries grow and others do not.

Question 19

Which of the following policies is most likely to stimulate economic growth in a developing country?

Accepted Answer

Encouraging creative destruction and limiting protectionism.

Question 20

A country with a high rate of economic development typically experiences which demographic change over time?

Accepted Answer

A decline in birthrates and smaller families.

Global Economic Growth and Development: Key Concepts and International Comparisons

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