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Chapter 32: Q 32. (page 763)

Use the Rule of 72 to estimate how long it will take for India, Spain, and South Africa to double their standards of living.

Short Answer

Expert verified

India - 13.11 years, Spain - 25.17 years, South Africa - 1,200 years

Step by step solution

01

Step 1. Introduction 

The rule of 72 is a rule of thumb used to estimate the approximate time it would take a variable to double its value. It is generally used to estimate the expected time for an investment to double in value. Though it can also be used for other economic indicators.

02

Step 2. Explanation

The estimated time to double the standards of living can be obtained as,

Estimate Time=72GDP per capita growthForindia=725.49=13.11Forspain=722.86=25.17ForSouthAfrica=720.06=1200

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Most popular questions from this chapter

Prepare a chart that compares India, Spain, and South Africa based on the data you find. Describe the key differences between the countries. Rank these as high-, medium-, and low-income countries, explain what is surprising or expected about this data.

Is inflation likely to be a severe problem for at least some high-income economies in the near future?

What strategies did the East Asian Tigers employ to stimulate economic growth ?

Explain why is it difficult to set aside funds for investment when you are in poverty.

Why are inflationary dangers lower in the high-income economies than in low-income and middle-income economies?
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