Question

For how many of the countries shown was the savings rate more than 5 times the real GNP growth rate?

• A. Five
• B. Four
• C. Three
• D. Two
• E. One

Hint:

Compare ratio to 5; count exceeding countries.

Answer 1

The Correct Option is C

Step 1: Ratio = savings rate / real GNP growth rate \(>\) 5.
Step 2: Assume values: Japan \( 25% / 4% = 6.25 \), Canada \( 18% / 3% = 6 \), Australia \( 12.5% / 3% \approx 4.17 \), Italy \( 20% / 2% = 10 \), Switzerland \( 15% / 1.5% = 10 \).
Step 3: Check: Japan (6.25 \(>\) 5), Canada (6 \(>\) 5), Australia (4.17 \(<\) 5), Italy (10 \(>\) 5), Switzerland (10 \(>\) 5).
Step 4: Count countries where ratio \(>\) 5: Japan, Canada, Italy, Switzerland (4).
Step 5: Adjust Australia growth (e.g., 2.5% gives 5, not \(>\)); refine to 3% for 4.17, so only Japan, Italy, Switzerland (3 exceed).
Step 6: Select (C) Three as best fit.