CAT 2025 Slot 1 DILR Question & Solution
Data Set
Five countries engage in trade with each other. Each country levies import tariffs on the other countries. The import tariff levied by Country X on Country Y is calculated by multiplying the corresponding tariff percentage with the total imports of Country X from Country Y.
The radar chart below depicts different import tariff percentages charged by each of the five countries on the others. For example, US (the blue line in the chart) charges 20%, 40%, 30%, and 30% import tariff percentages on imports from France, India, Japan, and UK, respectively. The bar chart depicts the import tariffs levied by each county on other countries. For example, US charged import tariff of 3 billion USD on UK.
Assume that imports from one country to another equals the exports from the latter to the former.
The trade surplus of Country X with Country Y is defined as follows.
Trade surplus = Exports from Country X to Country Y - Imports to Country X from Country Y.
A negative trade surplus is called trade deficit.
Question 1
How much is Japan's export to India worth?
Solution:
The values given in both charts together are represented in the table below, with the import tariff percentages charged by each of the five countries on the others represented as a percentage, and the import tariffs levied by each country on other countries are represented in brackets(in billion USD).
Japan's export to India would be the same as India's import from Japan.
India is charging a 50% tariff on Japan, and the tariff by India on Japan equals 3.5 billion USD.
So, 50% of the imports equals 3.5 billion USD.
$$\dfrac{50}{100}\ \times\ $$ Imports $$=\ 3.5$$
Imports $$=\ 3.5\ \times\ 2\ =\ 7$$ billion USD.
The value of imports by India from Japan = Japan's export to India = 7 billion USD.
Hence, the correct answer is option C.
Question 2
Which among the following is the highest?
Solution:
The values given in both charts together are represented in the table below, with the import tariff percentages charged by each of the five countries on the others represented as a percentage, and the import tariffs levied by each country on other countries are represented in brackets(in billion USD).
Option A) Exports by Japan to the UK would be the same as the UK's imports from Japan.
The UK is charging a 40% tariff on Japan, and the tariff imposed by the UK on Japan equals 6 billion USD.
So, 40% of the imports equals 6 billion USD.
$$\dfrac{40}{100}\ \times\ $$ Imports $$=\ 6$$
Imports $$=\ 3\ \times\ 5\ =\ 15$$ billion USD.
The value of imports by the UK from Japan = Japan's export to the UK = 15 billion USD.
Option B) Imports by the US from France.
The US is charging a 20% tariff on France, and the tariff by the US on France equals 6 billion USD.
So, 20% of the imports equals 6 billion USD.
$$\dfrac{20}{100}\ \times\ $$ Imports $$=\ 6$$
Imports $$=\ 6\ \times\ 5\ =\ 30$$ billion USD.
The value of imports by the US from France = 30 billion USD.
Option C) Exports by France to Japan would be the same as Japan's imports from France.
Japan is charging a 30% tariff on France, and the tariff by Japan on France equals 3 billion USD.
So, 30% of the imports equals 3 billion USD.
$$\dfrac{30}{100}\ \times\ $$ Imports $$=\ 3$$
Imports $$=\ 1\ \times\ 10\ =\ 10$$ billion USD.
The value of imports by Japan from France = France's export to Japan = 10 billion USD.
Option D) Imports by France from India.
France is charging a 40% tariff on India, and the tariff by France on India equals 6.5 billion USD.
So, 40% of the imports equals 6.5 billion USD.
$$\dfrac{40}{100}\ \times\ $$ Imports $$=\ 6.5$$
Imports $$=\ 6.5\ \times\ 2.5\ =\ 16.25$$ billion USD.
The value of imports by France from India = 16.25 billion USD.
Out of all the options, the value of imports by the US from France is the highest.
Hence, the correct answer is option B.
Question 3
What is the trade surplus/trade deficit of India with UK?
Solution:
The values given in both charts together are represented in the table below, with the import tariff percentages charged by each of the five countries on the others represented as a percentage, and the import tariffs levied by each country on other countries are represented in brackets(in billion USD).
Trade surplus/trade deficit of India with the UK = Exports from India to the UK - Imports from India to the UK
Exports by India to the UK would be the same as the UK's imports from India.
The UK is charging a 30% tariff on India, and the tariff imposed by the UK on India equals 3 billion USD.
So, 30% of the imports equals 3 billion USD.
$$\dfrac{30}{100}\ \times\ $$ Imports $$=\ 3$$
Imports $$=\ 1\ \times\ 10\ =\ 10$$ billion USD.
The value of imports by the UK from India = India's export to the UK = 10 billion USD.
Imports by India from the UK can be calculated as,
India is charging a 20% tariff on the UK, and the tariff imposed by India on the UK equals 5 billion USD.
So, 20% of the imports equals 5 billion USD.
$$\dfrac{20}{100}\ \times\ $$ Imports $$=\ 5$$
Imports $$=\ 5\ \times\ 5\ =\ 25$$ billion USD.
The value of imports by India from the UK = 25 billion USD.
We can clearly see that the Imports are greater than the exports for India from the UK. So, the trade deficit can be calculated as,
Trade deficit = Exports from India to the UK - Imports from India to the UK = 10 billion USD - 25 billion USD = -15 billion USD.
So, there is a deficit of 15 billion USD.
Hence, the correct answer is option B.
Question 4
Among France and UK, who has/have trade surplus(es) with US?
Solution:
The values given in both charts together are represented in the table below, with the import tariff percentages charged by each of the five countries on the others represented as a percentage, and the import tariffs levied by each country on other countries are represented in brackets(in billion USD).
For France - Trade surplus/trade deficit of France with the US = Exports from France to the US - Imports from the US to France
Exports by France to the US would be the same as the US's imports from France.
The US is charging a 20% tariff on India, and the tariff imposed by the US on France equals 6 billion USD.
So, 20% of the imports equals 6 billion USD.
$$\dfrac{20}{100}\ \times\ $$ Imports $$=\ 6$$
Imports $$=\ 6\ \times\ 5\ =\ 30$$ billion USD.
The value of imports by the US from France = France's export to the US = 30 billion USD.
Imports by France from the US can be calculated as,
France is charging a 30% tariff on the US, and the tariff imposed by France on the US equals 5.5 billion USD.
So, 30% of the imports equals 5.5 billion USD.
$$\dfrac{30}{100}\ \times\ $$ Imports $$=\ 5.5$$
Imports $$=\ 5.5\ \times\ 3.34\ =\ 18.34$$ billion USD.
The value of imports by France from the US = 18.34 billion USD.
We can clearly see that the Imports are less than the exports for France from the US. So, the trade surplus can be calculated as,
Trade surplus = Exports from France to the US - Imports from France to the US = 30 billion USD - 18.34 billion USD = 11.67 billion USD.
So, there is a surplus of 11.67 billion USD.
For the UK - The Trade surplus/trade deficit of the UK with the US = Exports from the UK to the US - Imports from the US to the UK
Exports by the UK to the US would be the same as the US's imports from the UK.
The US is charging a 30% tariff on the UK, and the tariff imposed by the US on the UK equals 3 billion USD.
So, 30% of the imports equals 3 billion USD.
$$\dfrac{30}{100}\ \times\ $$ Imports $$=\ 3$$
Imports $$=\ 1\ \times\ 10\ =\ 10$$ billion USD.
The value of imports by the US from the UK = The UK's export to the US = 10 billion USD.
Imports by the UK from the US can be calculated as,
The UK is charging a 20% tariff on the US, and the tariff imposed by the UK on the US equals 2.5 billion USD.
So, 20% of the imports equals 2.5 billion USD.
$$\dfrac{20}{100}\ \times\ $$ Imports $$=\ 2.5$$
Imports $$=\ 2.5\ \times\ 5\ =\ 12.5$$ billion USD.
The value of imports by the UK from the US = 12.5 billion USD.
We can clearly see that the Imports are greater than the exports for the UK from the US. So, the trade deficit can be calculated as,
Trade deficit = Exports from the UK to the US - Imports from the UK to the US = 10 billion USD - 12.5 billion USD = -2.5 billion USD.
So, there is a deficit of 2.5 billion USD.
We can see that France has a surplus and the UK has a deficit with the UK.
Hence, the correct answer is option D.