Question

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

a. higher in Cartar than in Bovina, and it is the same in Bovina and Aire.
b. higher in Aire than in Bovina, and it is the same in Aire and Cartar.
c higher in Aire than in Cartar, and it is higher in Cartar than in Bovina.
d. higher in Cantar than in Aire, and it is higher in Aire than in Bovina.

Answer 1

The saving rate is calculated as the fraction of total income that is saved. Comparing the saving rates between the three countries, Aire has the highest saving rate at 25%, followed by Cartar at 16.67%, and Bovina at 11.11%. The correct answer is that the saving rate is higher in Aire than in Cartar, and higher in Cartar than in Bovina.

Step-by-step explanation:

To answer the question regarding the saving rate in the three imaginary countries, first we must calculate the saving rate for each country. The saving rate is typically calculated as the portion of income, or output, that is saved rather than consumed. In the case of the countries mentioned, we have:

Aire has savings of $4,000 and consumption of $12,000, which means the total income is the sum of saving and consumption, equating to $16,000. The saving rate for Aire is then $4,000 / $16,000, which equals 0.25 or 25%.

Bovina has savings of $3,000 and consumption of $24,000. Therefore, the total income is $27,000, and the saving rate is $3,000 / $27,000, or about 0.1111, which is 11.11%.

Cartar has savings of $10,000 and consumption of $50,000, resulting in a total income of $60,000. The saving rate in Cartar is $10,000 / $60,000, equal to 0.1667 or 16.67%.

Comparing these rates, we find that the saving rate is highest in Aire (25%), followed by Cartar (16.67%), and then Bovina (11.11%). Therefore, the correct option is:

c. higher in Aire than in Cartar, and it is higher in Cartar than in Bovina.

Answer 2

c higher in Aire than in Cartar, and it is higher in Cartar than in Bovina.

Step-by-step explanation:

As we know that,

Money supply = Saving amount + consumption amount

And, the saving rate would be

= (Saving amount ÷ money supply) × 100

So

For Aire, the saving rate would be

= ($4,000 ÷ $16,000) × 100

= 25%

For Bovina, the saving rate would be

= ($3,000 ÷ $27,000) × 100

= 11.11%

For Cartar, the saving rate would be

= ($10,000 ÷ $60,000) × 100

= 16.66%