As Applied to the Price Level, the "Rule of 70

question 7

Multiple Choice

As applied to the price level, the "rule of 70" indicates that the number of years required for the price to double can be found by:

• A)dividing "70" into the annual rate of inflation.
• B)dividing the annual rate of inflation into "70."
• C)subtracting the annual change in nominal incomes from "70."
• D)multiplying the annual rate of inflation by "70."

---

Definitions:

Common Resource

A resource like air or water, that provides users with tangible benefits but is difficult to exclude nonpaying users from consuming or depleting.

Publicly Owned

A description for businesses or assets owned by the government or the public sector, often emphasizing their accountability and service to the public rather than profit motive.

Tragedy of the Commons

A situation where individual users, acting independently according to their own self-interest, deplete or spoil shared resources, leading to overall degradation.

Rival In Consumption

A characteristic of a good whereby one person's use diminishes the ability of another person to use the same good.