Instructions

Directions for the next 4 questions: Answer these questions based on the data presented in the figure below. FEI for a country in a year, is the ratio (expressed as a percentage) of its foreign equity inflows to its GDP. The following figure displays the FEIs for select Asian countries for the years 1997 and 1998.

Question 21

China’s foreign equity inflows in 1998 were 10 times that into India. It can be concluded that:

Solution

Let the GDP of china and India be c and i respectively. According to given condition . We know that (Foreign inflows)china = 10*(Foreign inflows)India. And Foreign inflows = FEI * GDP . So we get , 4.8 * c = 10*0.72*i ; which is c=1.5*i . Hence , China’s GDP in 1998 was 50% higher than that of India.

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China’s foreign equity inflows in 1998 were 10 times that into India. It can be concluded that:

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