Gce Model Questions Vol1 2018 Economics Question 25

The Human Development Index (HDI) is the geometric mean of three dimension indices: health, education and standard of living.\n\nCurrent data for a country are:\n- Life expectancy at birth = 68 years (minimum 20, maximum 85).\n- Mean years of schooling = 6 years (minimum 0, maximum 15).\n- Expected years of schooling = 10 years (minimum 0, maximum 18).\n- GNI per capita (PPP) = \$8,000 (minimum \$100, maximum \$75,000).\n\nThe HDI is calculated as \(\text{HDI}=\sqrt[3]{\text{Health}\times\text{Education}\times\text{Standard\ of\ Living}}\).\n\nA new policy raises life expectancy by 4 years and increases GNI per capita by 20%, while the education indicators remain unchanged.\n\n(a) Compute the current HDI (to three decimal places).\n(b) Compute the new HDI after the policy (to three decimal places).\n(c) State the percentage change in the HDI (to one decimal place).