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# Some of the most prosperous nations in the world have

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Senior Manager
Joined: 06 Dec 2003
Posts: 365

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Location: India
Some of the most prosperous nations in the world have [#permalink]

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22 Jul 2004, 10:40
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Some of the most prosperous nations in the world have experienced a pronounced drop in nationale saving rates - the percentage of after-tax income an average household saves. This trend will undoubtably continue if the average age of these nationas' populations continues to rise, since older people have fewer reasons to save than do younger people.

Which one of the following indicates an error in the reasoning leading to the prediction above ?

(A) It fails to specify the many reasons younger people have for saving money, and it fails to identify which of those reasons is the strongest.
(B) It assumes that a negative savings rate-the result of the average household's spending all of its after-tax income as well as some of its exisiting savings - cannot ever come about in any nation.
(C) It fails to cite statistics showing that the average age of the population of certain nation is rising.
(D) It only takes into account the comparative number of reasons older and younger people,respectively,have for saving, and not the comparative strength of those reasons.
(E) It uses after-tax income as the base for computing the national savings rate without establishing by argument that after-tax income is a more appropriate base than before-tax income.

Dharmin
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Perseverance, Hard Work and self confidence

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Director
Joined: 13 Nov 2003
Posts: 957

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22 Jul 2004, 16:57
see if you can get a valid explanation here:
http://www.gmatclub.com/phpbb/viewtopic ... ving+rates

Kudos [?]: 178 [0], given: 0

22 Jul 2004, 16:57
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# Some of the most prosperous nations in the world have

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