Question

Answer the questions based on the information given below:
Balance of trade (BOT) is the difference between the value of a country's exports and the value of its imports for a given period.
If the import is growing at an annual rate of 20 % and export is growing at an annual rate of 25 %, then the percentage decrease in trade deficit from 1998–-1999 to 2020–-21 will be the nearest to ___.

• A. 10%
• B. 5%
• C. 15%
• D. 20%

Answer 1

The correct option is B 5%

Import in 2020–21 = 5×1.2×1.2 = 7.2 billion

Export in 2020–21 = 4×1.25×1.25 = 6.25 billion

Balance of trade = 6.25 – 7.2 = .95 billion

Percentage decrease in trade deficit = (1 – 0.95) × 100 = 5%

Hence, option B is correct