Suppose real GDPs in Hauck and Meran are identical at $10 trillion in 2000. Suppose Hauck's economic growth rate is 2% and Meran's is 4% and the rates remain constant over time. Calculate the percentage difference in their levels of potential output in 2036.

A. Meran’s potential output will be 100% higher than that of Hauck’s.

Explanation:

Using the rule of 70

For Meran' we find that in approximately 36 years (2000 - 2036), their output quadruple at 4% increases. That is,

Time taken to double = 70/4 = 17.5 years

17.5 × 2 = 35 years (time taken to quadruple).

While for Hauck, at 2% increase will take them 35 years to double using the rule of 70. That is,

70/2 = 35 years (time taken to double).

Thus, by 2036, Meran output will be 100% greater than that of Hauck.

whole quiz

1. the sum of all activities involved in getting high-quality products into the marketplace

2.operations

3. the principle of looking at the supply chain as a whole in order to improve the overall flow through the system.

4. produced; performed

5. activities producing tangible products, such as radios, newspapers, buses, and textbooks.

6. activities producing intangible and tangible products, such as entertainment, transportation, and education.

7.   customer focus

8. analyzing a competitor's products to identify desirable improvements

9. the systematic direction and control of the processes that transform resources into finished projects that create value for and provide benefits to consumers.

10. operation management.

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