CAT 2000 | Question: 156

Question

Answer the following question based on the information given below.
The figures below present annual growth rate, expressed as the $\%$ change relative to the previous year, in four sectors of the economy of the Republic of Reposia during the $9$ year period from $1990$ to $1998.$ Assume that the index of production for each of the four sectors is set at $100$ in $1989.$ Further, the four sectors manufacturing, mining and quarrying, electricity, and chemicals, respectively, constituted $20\%, 15\%, 10\%$ and $15\%$ of total industrial production in $1989.$

When was the highest level of production in the manufacturing sector achieved during the nine year period $1990-1998?$

• A. $1998$ 
• B. $1995$ 
• C. $1990$ 
• D. Cannot be determined

Answer 1

For the manufacturing sector let at the end of 1989 the production share be x then for the subsequent years we can calculate also as we can see from the bar chart due to its positive growth rate it would max out at 1998

Approximately : 

Yearly Calculations:

1990: x × 1.09 = 1.090x

1991: x × 1.09 × 0.99 = 1.079x

1992: x × 1.09 × 0.99 × 1.03 = 1.112x

1993: x × 1.09 × 0.99 × 1.03 × 1.06  = 1.178x

1994: x × 1.09 × 0.99 × 1.03 × 1.06 × 1.08 = 1.273x

1995: x × 1.09 × 0.99 × 1.03 × 1.06 × 1.08 × 1.14 =1.451x

1996: x × 1.09 × 0.99 × 1.03 × 1.06 × 1.08 × 1.14 × 1.07 = 1.553x

1997: x × 1.09 × 0.99 × 1.03 × 1.06 × 1.08 × 1.14 × 1.07 × 1.07 = 1.662x

1998: x × 1.09 × 0.99 × 1.03  × 1.06 × 1.08 × 1.14 × 1.07 × 1.07 × 1.04 = 1.728x

As predicted it maxes out at 1998.

Hence the correct answer is A 1998

Answer 2

A 1998