Gce Model Questions Vol1 2024 Economics Question 10

Three countries are evaluated on four development indicators as follows: | Country | GDP per capita (US$) | Literacy (%) | Life expectancy (years) | Gini coefficient | |---------|----------------------|--------------|--------------------------|-------------------| | A | 4 000 | 85 | 68 | 45 | | B | 7 500 | 92 | 74 | 38 | | C | 3 200 | 78 | 65 | 50 | A composite Development Index (DI) is constructed using min‑max normalisation for each indicator and the following weights: GDP per capita 0.2, Literacy 0.3, Life expectancy 0.3, and inverse Gini 0.2 (where a lower Gini is better). The inverse Gini is normalised as \( (G_{\max} - G)/(G_{\max} - G_{\min}) \). (a) Calculate the DI for each country (to three decimal places) and rank the countries from highest to lowest DI. (b) If Country C's GDP per capita rises by 20 % while all other indicators remain unchanged, what is its new DI (to three decimal places) and does its rank change?