Comprehension
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: 1
The country with the largest %age change in FEI in 1998 relative to its FEI in 1997, is:
The country with the largest %age change in FEI in 1998 relative to its FEI in 1997, is:
Show Hint
When comparing percentage changes, use $\frac{\text{new} - \text{old}}{\text{old}} \times 100%$.
Updated On: Sep 21, 2026
- India
- China
- Malaysia
- Thailand
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The Correct Option is A
Solution and Explanation
From the graph:
India: $0.72 \to 1.71$, change $\approx 137.5%$ increase.
China: $4.80 \to 5.96$, change $\approx 24.2%$ increase.
Malaysia: $9.92 \to 10.97$, change $\approx 10.6%$ increase.
Thailand: $5.09 \to 5.82$, change $\approx 14.3%$ increase.
The largest percentage change is for India.
\[
\boxed{\text{India}}
\]
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Question: 2
Based on the data provided, it can be concluded that
Based on the data provided, it can be concluded that
Show Hint
The figure gives FEI as a percentage of GDP, not the absolute inflow. Ask whether the GDP change is known.
Updated On: Nov 4, 2026
- none of the above can be inferred.
- absolute value of foreign equity inflows was higher in 1998 for Thailand and lower for China than the corresponding values in 1997.
- absolute value of foreign equity inflows was lower in 1998 for both India and China than the corresponding values in 1997.
- absolute value of foreign equity inflows in 1998 was higher than that in 1997 for both Thailand and South Korea.
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The Correct Option is A
Solution and Explanation
Step 1: Read the chart.
FEI (%) for 1997 and 1998: India 1.71 and 0.72; China 5.96 and 4.8; Malaysia 10.67 and 9.92; South Korea 2.16 and 2.5; Thailand 5.09 and 5.82.
Step 2: What FEI means.
FEI = (foreign equity inflow / GDP) \(\times 100\). So inflow = FEI \(\times\) GDP / 100. To compare the absolute inflow in two years we need the GDP of both years; only the ratios are given.
Step 3: Check the options.
Option (4) needs the GDP of Thailand and South Korea to be roughly constant or rising; this is not given (FEI up does not imply inflow up if GDP falls sharply). Likewise options (2) and (3): a lower FEI does not imply a lower inflow, since GDP may have grown. In the next question we see that with a 7% GDP growth China's inflow still falls, but that uses extra information that is not given here. With no GDP data, none of the statements can be concluded.
Final Answer:
The correct option is (1): none of the above can be inferred.
FEI (%) for 1997 and 1998: India 1.71 and 0.72; China 5.96 and 4.8; Malaysia 10.67 and 9.92; South Korea 2.16 and 2.5; Thailand 5.09 and 5.82.
Step 2: What FEI means.
FEI = (foreign equity inflow / GDP) \(\times 100\). So inflow = FEI \(\times\) GDP / 100. To compare the absolute inflow in two years we need the GDP of both years; only the ratios are given.
Step 3: Check the options.
Option (4) needs the GDP of Thailand and South Korea to be roughly constant or rising; this is not given (FEI up does not imply inflow up if GDP falls sharply). Likewise options (2) and (3): a lower FEI does not imply a lower inflow, since GDP may have grown. In the next question we see that with a 7% GDP growth China's inflow still falls, but that uses extra information that is not given here. With no GDP data, none of the statements can be concluded.
Final Answer:
The correct option is (1): none of the above can be inferred.
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Question: 3
It is known that China's GDP in 1998 was 7% higher than its value in 1997, while India's GDP grew by 2% during the same period. The GDP of South Korea, on the other hand, fell by 5%. Which of the following statements is/are true?
1. Foreign equity inflows to China were higher in 1998 than in 1997.
2. Foreign equity inflows to China were lower in 1998 than in 1997.
3. Foreign equity inflows to India were higher in 1998 than in 1997.
4. Foreign equity inflows to South Korea decreased in 1998 relative to 1997.
5. Foreign equity inflows to South Korea increased in 1998 relative to 1997.
It is known that China's GDP in 1998 was 7% higher than its value in 1997, while India's GDP grew by 2% during the same period. The GDP of South Korea, on the other hand, fell by 5%. Which of the following statements is/are true?
1. Foreign equity inflows to China were higher in 1998 than in 1997.
2. Foreign equity inflows to China were lower in 1998 than in 1997.
3. Foreign equity inflows to India were higher in 1998 than in 1997.
4. Foreign equity inflows to South Korea decreased in 1998 relative to 1997.
5. Foreign equity inflows to South Korea increased in 1998 relative to 1997.
1. Foreign equity inflows to China were higher in 1998 than in 1997.
2. Foreign equity inflows to China were lower in 1998 than in 1997.
3. Foreign equity inflows to India were higher in 1998 than in 1997.
4. Foreign equity inflows to South Korea decreased in 1998 relative to 1997.
5. Foreign equity inflows to South Korea increased in 1998 relative to 1997.
Show Hint
Inflow = FEI \(\times\) GDP. Multiply the FEI ratio by the GDP growth factor for each country.
Updated On: Nov 4, 2026
- 2 & 5
- 2, 3 & 4
- 1, 3 & 5
- 1, 3 & 4
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The Correct Option is A
Solution and Explanation
Step 1: Use inflow = FEI \(\times\) GDP / 100.
The ratio of inflows (1998 : 1997) = (FEI\(_{98}\)/FEI\(_{97}\)) \(\times\) (GDP\(_{98}\)/GDP\(_{97}\)).
Step 2: China.
FEI: 5.96 to 4.8; GDP factor 1.07. Ratio \(= \frac{4.8}{5.96} \times 1.07 \approx 0.805 \times 1.07 \approx 0.862 < 1\). Inflow fell, so statement 2 is true and 1 is false.
Step 3: India.
FEI: 1.71 to 0.72; GDP factor 1.02. Ratio \(= \frac{0.72}{1.71} \times 1.02 \approx 0.421 \times 1.02 \approx 0.429 < 1\). Inflow fell, so statement 3 is false.
Step 4: South Korea.
FEI: 2.16 to 2.5; GDP factor 0.95. Ratio \(= \frac{2.5}{2.16} \times 0.95 \approx 1.157 \times 0.95 \approx 1.10 > 1\). Inflow rose, so statement 5 is true and 4 is false.
Step 5: Combine.
True statements: 2 and 5.
Final Answer:
The correct option is (1): 2 & 5
The ratio of inflows (1998 : 1997) = (FEI\(_{98}\)/FEI\(_{97}\)) \(\times\) (GDP\(_{98}\)/GDP\(_{97}\)).
Step 2: China.
FEI: 5.96 to 4.8; GDP factor 1.07. Ratio \(= \frac{4.8}{5.96} \times 1.07 \approx 0.805 \times 1.07 \approx 0.862 < 1\). Inflow fell, so statement 2 is true and 1 is false.
Step 3: India.
FEI: 1.71 to 0.72; GDP factor 1.02. Ratio \(= \frac{0.72}{1.71} \times 1.02 \approx 0.421 \times 1.02 \approx 0.429 < 1\). Inflow fell, so statement 3 is false.
Step 4: South Korea.
FEI: 2.16 to 2.5; GDP factor 0.95. Ratio \(= \frac{2.5}{2.16} \times 0.95 \approx 1.157 \times 0.95 \approx 1.10 > 1\). Inflow rose, so statement 5 is true and 4 is false.
Step 5: Combine.
True statements: 2 and 5.
Final Answer:
The correct option is (1): 2 & 5
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Question: 4
China’s foreign equity inflows in 1998 were 10 times those into India. What can be concluded?
China’s foreign equity inflows in 1998 were 10 times those into India. What can be concluded?
Show Hint
When FEI ratios and absolute amounts are related, use simple equations to relate GDPs.
Updated On: Sep 21, 2026
- China’s GDP in 1998 was $40%$ higher than that of India.
- China’s GDP in 1998 was $70%$ higher than that of India.
- China’s GDP in 1998 was $50%$ higher than that of India.
- No inference can be drawn about relative magnitudes of GDPs.
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The Correct Option is C
Solution and Explanation
Let India’s GDP = $G_I$, China’s GDP = $G_C$.
Given:
\[
0.0596 G_C = 10 \times (0.0171 G_I) \Rightarrow G_C / G_I \approx 1.5
\]
Thus, China’s GDP was $50%$ higher than India’s in 1998.
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