The summer economics quiz 2018: Here are the answers
Here are the answers to Deloitte's summer economics quiz.
1. What reason does the UKs Office for National Statistics (ONS) give for the 80% decline in UK residents taking day trips abroad since the 1990s?
A. Better weather in the UK
B. An increase in staycations
C. A decline in booze cruise trips
D. Preference for longer holidays
Answer: C. A decline in booze cruise trips. UK residents are making fewer day-trips abroad. The ONS think this could be because many of these visits were booze cruises – journeys across the English Channel to stock up on alcohol and cigarettes – which are no longer as worthwhile as they used to be. Duty-free sales within the EU ended in 1999, France has been increasing the price of cigarettes since 2000, and in recent years, the pound has fallen in value against the euro.
2. Where was the most popular destination for UK holidaymakers in 2017?
Answer: A. Spain. Spain received 13.9 million British tourists in 2017, the same number that travelled to the four next popular destinations combined – France, Italy, Portugal and the US. The number of holidays to Spain has doubled over the last 20 years while France is one of the few countries were visiting less than in 1996. Other destinations that have seen a decline in British tourists over the same period are Turkey, Egypt, Kenya and Tunisia.
3. Where is the cheapest place in the world to buy a McDonalds Big Mac?
Answer: C. Egypt. Egypt is the cheapest place in the world to buy a Big Mac according to The Economists Big Mac index. The index compares the price of a Big Mac across different countries in order to assess how over/ undervalued the currency is against a range of currencies. A Big Mac costs £3.19 in the UK and just £1.32 in Egypt, suggesting the Egyptian pound is undervalued by 58.6%. The Egyptian pound saw a sharp decline after it was unpegged from the dollar in 2016 at the re-quest of the International Monetary Fund as part of a reform package. In Croatia the burger costs £2.50, in Ukraine £1.44 and in India £1.89. The most expensive country to buy a Big Mac is Switzerland, where it will set you back £4.92, suggesting the Swiss franc is 54.7% overvalued. The Swiss Franc benefits from the nations reputation for political and economic stability.
4. How much did the average UK holidaymaker spend abroad in 2017? (The aver-age duration was around nine days)
Answer: B. £670. Last year the average level of spend by a UK resident taking a holiday abroad was £670. The average UK resident spends £549 by holidaying in Europe and £1,319 in the US. In terms of spending per day, Brazil was the most ex-pensive destination for UK tourists in 2017 at £218 with some North African countries being the cheapest (£19 per day).
5. What, if any, charges do standard debit and credit cards add to payments whilst abroad?
Answer: D. 3%. According to the BBC, the average charge for using your credit and debit cards abroad is 3% on all spending, plus additional costs for using cash ma-chines. The BBC reports that UK holidaymakers are collectively incurring charges of £1bn a year on overseas spending. This works out at roughly £14 per trip made by UK residents. Figures calculated by FairX show the average fee for withdrawing £50 from a cash machine using a debit card is £2.64 and the average non-sterling transaction fee for making a £50 debit or credit card payment is £1.40. Martin Lewis, founder of Money Saving Expert, advises travellers to apply for special cards which have no charge for overseas payments. He also concludes that it is almost always better to make card transactions in local currency rather than paying in sterling. This is because the overseas store/bank is doing the conversion and typically the rates are high.
6. Last year there were 39 million international visits to the UK, the highest number on record and up 25% from 2012. How many trips abroad did UK residents take last year?
A. 14 million
B. 30 million
C. 56 million
D. 72 million
Answer: D. 72 million. UK residents made 72 million visits overseas in 2017, also a new record. They spent a total of £44.8bn, 83% more than was spent by overseas visitors to the UK. Of the international holiday makers visiting the UK, Barclays re-ports that the Chinese have the largest overall budgets, averaging £5,424, nearly £600 of which is typically earmarked for clothes shopping.
7. Employees from which country enjoy the most generous holiday entitlement?
Answer: D. Austria. Austrians enjoy the most holiday with a statutory minimum of 25 days off plus 13 days of public holidays. Greece and France also have a mandatory minimum of 25 days off but have a lower number of public holidays. In contrast, Filipinos are entitled to just 5 days in holidays. UK employees get a minimum of 20 days and in the US, there is no holiday entitlement but workers typically take around 15 days.
8. In 2010 there were 490,000 international visits to Iceland, what was the number in 2016?
C. 1 million
D. 1.8 million
Answer: D. 1.8 million. Iceland received 1.8 million international visits in 2016 – a 270% increase in six years and a number that is five times larger than its population (340,000). The economy suffered a deep financial crisis in 2008 when many of its banks collapsed along with its currency but is now growing apace, supported in part by its booming tourism industry. The country is popular with tourists who want to see the Northern lights and the scenery that was captured in the Lord of the Rings films. However, according to Trip Advisor, the most highly rated attraction in Reykjavík is the Hallagrimskirkja cathedral which boasts breath-taking architecture and a viewpoint to take in the rest of the city.
9. Of all tourism expenditure by EU citizens, what percentage was on trips inside the EU in 2016?
Answer: D. 79%. In 2016, EU citizens spent 79% of their holiday money within the 28-member states, and 84% in Europe. The next largest recipient of expenditure was America (7%), and then Asia (6%) with 2% of spending in Africa. German tourists accounted for 28% of total EU tourism expenditure.
10. What does the SPF number on your bottle of sun cream mean?
A. The number gives an indication as to the percentage of the suns harmful (UVB) rays that the sun cream will block
B. The temperature in degrees centigrade, for which the sun cream is appropriate
C. How many minutes can be safely spent in the sun until the cream needs to be reapplied
D. The skin temperature in degrees centigrade that may not be exceeded for the cream to prevent burning
Answer: A. The number gives an indication as to the percentage of the suns harmful (UVB) rays that the sun cream will block. SPF (sun protection factor) is the fraction of sunburn producing UV rays that reach the skin. The reciprocal of the SPF factor on a bottle of sun cream represents the fraction of UVB rays that will reach the skin once the cream is applied. For example, an SPF factor of 15 will filter all but 7% of rays (1/15= 7%), an SPF of 30 will block all but 3% and SPF of 50 will block all but 2%. It can also be thought of as a multiple of the number of minutes youd have been able to stay in the sun for without burning with no sun cream at all.