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3) Your total cash income is $5,000.00 and your total expenditures including income taxes are $4,650.00. If you have paid $1,
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Answer #1

The saving ratio is 10.9375%

Saving Ratio = (Household savings / Average household disposable income) x 100

= ($350 / $3200) x 100 = 10.9375%

where,

Household savings is the income that can be spent on investments after expenses.

Hence, Household savings here will be (Cash income - Total expenditure) i.e. ($5000 - $4650) = $350

Average household disposable income is the income that can be spent after paying taxes.

Hence, Average household disposable income will be $5000 - $1800 = $3200

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