A:

The rule of 70 could be used to indicate the approximate number of years that it would take a company's economic growth to double. To estimate the number of years it would take a country's gross domestic product (GDP) or gross national product (GNP) per capita to double, the estimated growth rates for these variables must be known.

To determine the number of years it would take for a certain variable to double, using the rule of 70, divide 70 by the expected economic growth rate. Similarly, you can estimate the economic growth rate, given the expected number of years it would take for a country's GDP or GNP per capita to double.

For example, assume the U.S. GDP was $15 billion for the previous year and $15.5 billion for the current year. To calculate the estimated future economic growth rate, subtract the previous year's GDP from the current year's GDP. Then, divide the resulting value by the previous year's GDP.

The resulting economic growth rate is 3.33% (($15.5 billion - $15 billion)/$15 billion * 100%). Using the rule of 70 formula, the estimated number of years it would take the U.S. GDP to double is 21.02 years.

Similarly, assume that Germany estimates that it would take 15 years for its GDP to double. The rule of 70 indicates that Germany's future economic growth rate is 4.67% (70/15). Therefore, when compared to the U.S. future economic growth rate, Germany's is 1.34% higher.

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