Instructions

Consider the information provided in the figure below relating to India's foreign trade in 1997-98 and the first eight months of 1998-99.

Total trade with a region is defined as the sum of exports to and imports from that region.
Trade deficit is defined as the excess of imports over exports. Trade deficit may be negative.

A:USA. B:Germany C:Other EU. D:U.K.  E:Japan  F:Russia  

G:Other East Europe  H:OPEC   I:Asia  J:Other LDCs  K:Others 

Question 142

Assume that the average monthly exports from India and imports to India during the remaining four months of 1998-99 would be the same as that for the first eight months of the year. What is the percentage growth rate in India’s total trade deficit between 1997-98 and 1998-99?

Solution

Since the increase in imports and exports is at average, the exports and imports in the next 4months will be half of their respective first eight months.

Exports in first 8 months of 1998-1999 is $21436 so, in next 4 months it will be 21436/2 = 10718

Total exports= 21346+10718=32154.

Similarly, total imports= 28126+ 28126/2 = 42189

Trade deficit = 42189-32064= 10035

Trade deficit in 1997-98= 40779-33979=6800.

Increase = (10035-6800)/6800 = 47.5%

Video Solution

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