Comprehension
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 an other 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?
How much is Japan’s export to India worth?
Show Hint
When tariff amounts and tariff percentages are provided, always compute imports as:
\[
\text{Imports} = \frac{\text{Tariff Amount}}{\text{Tariff Rate}}.
\]
Updated On: Jul 4, 2026
- 8.5 Billion USD
- 16.0 Billion USD
- 7.0 Billion USD
- 1.75 Billion USD
Show Solution
The Correct Option is C
Solution and Explanation
Approach: Test the options by working backwards. The import value, the tariff percentage and the tariff amount are locked together by one equation, so a correct export figure must reproduce the chart's tariff amount when multiplied by India's tariff rate on Japan.
Setup: Japan's export to India equals India's import from Japan (exports one way equal imports the other way). For that flow, India is the one charging the tariff, so $ \text{tariff amount} = \text{tariff rate} \times \text{import value} $. India's tariff rate on Japan read from the radar is $ 50\% $, and India's tariff bar on Japan is $ 3.5 $ billion USD.
Check each option: A correct import value $ V $ must satisfy $ 0.50 \times V = 3.5 $.
If $ V = 8.5 $: $ 0.50 \times 8.5 = 4.25 \ne 3.5 $. Reject.
If $ V = 16.0 $: $ 0.50 \times 16.0 = 8.0 \ne 3.5 $. Reject.
If $ V = 7.0 $: $ 0.50 \times 7.0 = 3.5 $. Matches the bar exactly.
If $ V = 1.75 $: $ 0.50 \times 1.75 = 0.875 \ne 3.5 $. Reject.
Only $ V = 7.0 $ regenerates the chart value, so Japan's export to India is 7.0 Billion USD.
Setup: Japan's export to India equals India's import from Japan (exports one way equal imports the other way). For that flow, India is the one charging the tariff, so $ \text{tariff amount} = \text{tariff rate} \times \text{import value} $. India's tariff rate on Japan read from the radar is $ 50\% $, and India's tariff bar on Japan is $ 3.5 $ billion USD.
Check each option: A correct import value $ V $ must satisfy $ 0.50 \times V = 3.5 $.
If $ V = 8.5 $: $ 0.50 \times 8.5 = 4.25 \ne 3.5 $. Reject.
If $ V = 16.0 $: $ 0.50 \times 16.0 = 8.0 \ne 3.5 $. Reject.
If $ V = 7.0 $: $ 0.50 \times 7.0 = 3.5 $. Matches the bar exactly.
If $ V = 1.75 $: $ 0.50 \times 1.75 = 0.875 \ne 3.5 $. Reject.
Only $ V = 7.0 $ regenerates the chart value, so Japan's export to India is 7.0 Billion USD.
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Question: 2
Which among the following is the highest?
Which among the following is the highest?
Show Hint
To compare trade values from tariff data, always convert tariff amounts back into trade volumes using
\[
\text{Trade Value} = \frac{\text{Tariff Collected}}{\text{Tariff Rate}}.
\]
This avoids misinterpretation from the bar chart alone.
Updated On: Jul 4, 2026
- Exports by Japan to UK
- Imports by US from France
- Exports by France to Japan
- Imports by France from India
Show Solution
The Correct Option is B
Solution and Explanation
Approach: Skip the exact arithmetic and reason with the ratio. Import value $ = \dfrac{\text{amount}}{\text{rate}} $, so a small denominator (low tariff rate) with a healthy numerator wins. Scan the four cells for the smallest rate paired with a large amount.
Compare the rates: Imports US from France uses the US tariff on France, which the passage itself gives as $ 20\% $ - the single lowest rate visible on the radar. Imports France from India uses France's $ 40\% $ on India; exports France to Japan uses Japan's $ 40\% $ on France; exports Japan to UK uses UK's $ 30\% $ on Japan.
Compare the amounts: The US-on-France bar ($ 6 $B) is among the taller bars, while the others sit around $ 3 $ to $ 6 $B.
Conclusion: The US-from-France cell combines the lowest rate ($ 20\% $, half of the $ 40\% $ rivals) with a large amount, so its $ \dfrac{6}{0.20} = 30 $B import base dominates. Even the next best (exports Japan to UK at $ \dfrac{6}{0.30}=20 $B) cannot catch it. The highest is Imports by US from France.
Compare the rates: Imports US from France uses the US tariff on France, which the passage itself gives as $ 20\% $ - the single lowest rate visible on the radar. Imports France from India uses France's $ 40\% $ on India; exports France to Japan uses Japan's $ 40\% $ on France; exports Japan to UK uses UK's $ 30\% $ on Japan.
Compare the amounts: The US-on-France bar ($ 6 $B) is among the taller bars, while the others sit around $ 3 $ to $ 6 $B.
Conclusion: The US-from-France cell combines the lowest rate ($ 20\% $, half of the $ 40\% $ rivals) with a large amount, so its $ \dfrac{6}{0.20} = 30 $B import base dominates. Even the next best (exports Japan to UK at $ \dfrac{6}{0.30}=20 $B) cannot catch it. The highest is Imports by US from France.
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Question: 3
What is the trade surplus/trade deficit of India with UK?
What is the trade surplus/trade deficit of India with UK?
Show Hint
When comparing trade balances, always compute imports and exports separately from
\[
\text{Imports/Exports} = \frac{\text{Tariff Collected}}{\text{Tariff Rate}},
\]
then subtract. Signs matter: negative means deficit.
Updated On: Jul 4, 2026
- Surplus of 15.0 Billion USD
- Deficit of 15.0 Billion USD
- Surplus of 10.0 Billion USD
- Deficit of 10.0 Billion USD
Show Solution
The Correct Option is B
Solution and Explanation
Approach: Decide the sign first, then the size. Surplus needs exports to beat imports; a deficit means India buys more from UK than it sells. Build the two flows independently from the chart and compare.
Flow 1 - what India sells to UK: This equals what UK imports from India. UK is the tariff-charger on this flow, charging $ 20\% $, and its tariff bar on India is $ 3 $B. So the trade value is $ \dfrac{3}{0.20} = 15 $B. India's exports to UK $ = 15 $B.
Flow 2 - what India buys from UK: This equals what UK exports to India. India is the tariff-charger here; combining India's rate on UK with India's tariff bar on UK gives a trade value of $ 30 $B. India's imports from UK $ = 30 $B.
Net position: India sells $ 15 $B but buys $ 30 $B, so it is $ 30 - 15 = 15 $B short on this relationship. Buying more than selling is a deficit, so India has a deficit of 15.0 Billion USD with the UK.
Flow 1 - what India sells to UK: This equals what UK imports from India. UK is the tariff-charger on this flow, charging $ 20\% $, and its tariff bar on India is $ 3 $B. So the trade value is $ \dfrac{3}{0.20} = 15 $B. India's exports to UK $ = 15 $B.
Flow 2 - what India buys from UK: This equals what UK exports to India. India is the tariff-charger here; combining India's rate on UK with India's tariff bar on UK gives a trade value of $ 30 $B. India's imports from UK $ = 30 $B.
Net position: India sells $ 15 $B but buys $ 30 $B, so it is $ 30 - 15 = 15 $B short on this relationship. Buying more than selling is a deficit, so India has a deficit of 15.0 Billion USD with the UK.
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Question: 4
Among France and UK, who has/have trade surplus(es) with US?
Among France and UK, who has/have trade surplus(es) with US?
Show Hint
A trade surplus requires:
\[
\text{Exports} > \text{Imports}.
\]
Always compute both sides using tariff amount \(\div\) tariff percentage before concluding.
Updated On: Jul 4, 2026
- Neither France nor UK
- Both France and UK
- Only UK
- Only France
Show Solution
The Correct Option is D
Solution and Explanation
Approach: The whole answer turns on one lever - the tariff rate that sits in the denominator of each export. A very low rate makes the export base balloon, which is what creates a surplus. Look at how each country's exports to the US are built and whether they overpower the imports.
France's case: France's exports to the US equal what the US imports from France. The US charges France only $ 20\% $ - the lowest rate in the chart - on a $ 6 $B bar, so this export base is $ \dfrac{6}{0.20}=30 $B, a very large figure. France's imports from the US come from France's own (higher) tariff on the US, giving a far smaller base near $ 14 $B. Big exports, modest imports - France enjoys a surplus of about $ 15 $B.
UK's case: The US charges the UK $ 30\% $, so UK's exports to the US are $ \dfrac{3}{0.30}=10 $B - much smaller, because the higher rate shrinks the base. UK's imports from the US work out a little higher, around $ 15 $B. Here exports trail imports, so the UK runs a deficit.
Conclusion: France's low US tariff hands it a surplus while the UK's higher US tariff leaves it in deficit, so only France has a trade surplus with the US.
France's case: France's exports to the US equal what the US imports from France. The US charges France only $ 20\% $ - the lowest rate in the chart - on a $ 6 $B bar, so this export base is $ \dfrac{6}{0.20}=30 $B, a very large figure. France's imports from the US come from France's own (higher) tariff on the US, giving a far smaller base near $ 14 $B. Big exports, modest imports - France enjoys a surplus of about $ 15 $B.
UK's case: The US charges the UK $ 30\% $, so UK's exports to the US are $ \dfrac{3}{0.30}=10 $B - much smaller, because the higher rate shrinks the base. UK's imports from the US work out a little higher, around $ 15 $B. Here exports trail imports, so the UK runs a deficit.
Conclusion: France's low US tariff hands it a surplus while the UK's higher US tariff leaves it in deficit, so only France has a trade surplus with the US.
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