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GATE 2014 CS (CS3) – Question 8

General Aptitude · Quantitative Aptitude: Arithmetic and Number Computation · 2 marks · Multiple choice

GDP in rupees grew 7% during 2012–2013. For international comparison it is converted to USD at market exchange rates. During this period the exchange rate increased from ₹50/USD to ₹60/USD. India’s GDP in USD ______.

  1. increased by 5%
  2. decreased by 13%
  3. decreased by 20%
  4. decreased by 11%

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Correct answer: (D) decreased by 11%

Explanation

Let initial rupee GDP be G. Dollar GDP changes from G/50to1.07G/60. Their ratio is1.07×50/60=0.891667, a decrease of10.8333%, approximately **11%,D**. Rupee growth and exchange-rate change must be combined multiplicatively.