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Part 1

Find the time it would take for the general level of prices in the economy to double at an average annual inflation rate of 

6​%.

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Part 1

The doubling time is about 

years.

​(Round to the nearest year as​ needed.) 

To determine how long it will take for the general level of prices in the economy to double at an average annual inflation rate of 6%, we can use the Rule of 72. This rule provides a quick estimate for the doubling time of an investment or price level based on a constant interest or inflation rate.

### Rule of 72 Formula:
\[
\text{Doubling Time} = \frac{72}{\text{Inflation Rate}}
\]

Given:
- Inflation Rate = 6%

### Calculation:
\[
\text{Doubling Time} = \frac{72}{6} = 12 \text{ years}
\]

So, it would take approximately **12 years** for the general level of prices to double at an average annual inflation rate of 6%.

Would you like more details or have any questions about this calculation?

Here are some related questions:
1. How would the doubling time change if the inflation rate were 3% instead of 6%?
2. What is the Rule of 69, and how does it differ from the Rule of 72?
3. How would you calculate the doubling time for a varying inflation rate?
4. Can the Rule of 72 be applied to compound interest calculations?
5. How does inflation impact purchasing power over time?

**Tip:** The Rule of 72 is a useful tool for quickly estimating the effects of interest rates or inflation without needing a calculator.

Learn how to calculate the time it takes for the general level of prices to double in an economy with a 6% average annual inflation rate using the Rule of 72. This problem explores the concept of exponential growth and inflation impacts. Suitable for high school students studying economics.

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