Question

Consider three imaginary countries. In Aire, saving amounts to $4,000 and consumption amounts to $12,000; in Bovina, saving amounts to $3,000 and consumption amounts to $24,000; and in Cartar, saving amounts to $10,000 and consumption amounts to $50,000. The saving rate is

Answer 1

Answer:

The savings rate is higher in Aire than in Carttar and it is higher in cartar than in Bolivia.

Explanation:

To calculate savings rate:

[(Total income - consumption)/total income] x 100

Where total income = consumption + savings.

The savings rates are as follows

Aires: [(16000 -12,000)/16000] x 100

= 400/16

= 25%

Bovina: [(27000 - 24000)/27000] x 100

= 300/27

= 11.11%

Cartar: [(60000 - 50000)/60000] x 100

= 100/6

= 16.67%