CAT 2000 Question Paper Question 25

Instructions

Directions for the next 4 questions: Answer these questions based on the table below:

The table shows trends in external transactions of Indian corporate sector during the period 1993-94 to 1997-98. In addition, following definitions hold good:

Sales, Imports, and Exports, respectively denote the sales, imports and exports in year i.

Deficit in year I, Deficit1 = Imports - Exports

Deficit Intensity in year I, DI = Deficit/Sales Growth rate of deficit intensity in year I, GDI = $$\frac{DI_i - DI_{i-1}}{DI_{i-1}}$$

Further, note that all imports are classified as either raw material or capital goods.

Trends in External Transactions of Indian Corporate Sector (All figures in %)

Question 25

Which of the following statements can be inferred to be true from the given data?

Solution

We can't say anything regarding exports and imports as the value given is export intensity and import intensity . Also statement C is clearly false. And we can infer option D easily from the table.

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