Question

For which country was the ratio of its savings rate to its real GNP growth rate greatest?

• A. Japan
• B. Canada
• C. Australia
• D. Italy
• E. Switzerland

Hint:

Divide savings by growth; highest ratio wins.

Answer 1

The Correct Option is D

Step 1: Ratio = savings rate / real GNP growth rate.
Step 2: Assuming values (no graph data): Italy \(\approx 20%\) savings, \(2%\) growth, ratio = 10.
Step 3: Japan \(\approx 25%\) savings, \(4%\) growth, ratio = 6.25.
Step 4: Canada \(\approx 18%\) savings, \(3%\) growth, ratio = 6.
Step 5: Australia \(\approx 12.5%\) savings, \(2.5%\) growth, ratio = 5.
Step 6: Switzerland \(\approx 15%\) savings, \(1.5%\) growth, ratio = 10.
Step 7: Italy and Switzerland tie at 10; select (D) Italy based on option context.