Question
If the import is growing at an annual rate of 15 % and export is growing at an annual rate of 5 % then percentage increase in trade deficit from 1998-1999 to 2000-01 will be nearest to ?
Answer: Option A
:
A
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A
Initial trade deficit≈ 3449510
Import increases at a rate of 15% every year for 4 years. This means that it's final value will be
17609863×1.054= 21404898
Similarly Export increases at a rate of 5% every year for 4 years. This means that it's final value will be
14160353×1.154=24766545
New trade deficit ≈ 3361647
Percentage increase is from 3449510 to 3361647 ≈ 290% increase.
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