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Our Christmas Quiz offers an eclectic test of knowledge of economics and business. The answers, and a brief explanation of the factors at work, are at the end of this note.

 

  1. Which of the following countries has the most affordable housing market relative to incomes, according to The Economist’s house price affordability index?

 

Singapore

UK

Germany

Japan

 

  1. Which of the following ranks as the world’s happiest country in the UN’s World Happiness Report for 2017?

 

US

China

Costa Rica

Norway

 

  1. In which of the following countries do people work the longest hours?

 

UK

Poland

Mexico

Germany

 

  1. Which country’s currency is the most undervalued against the British pound using the the Economist’s Big Mac index?

 

Norway

Ukraine

Sweden

Switzerland

 

  1. United Airlines temporarily suspended flights to which city this year as a result of concerns over poor air quality?

 

Bangkok

Beijing

London

New Delhi

According to a Credit Suisse study the wealthiest 1% of the world’s population own what proportion of global wealth?

 

10%

30%

50%

90%

 

  1. A parking space in the UK sold for £40,000 this year. Where was it?

 

Mayfair – London

Chelsea – London

Sandbanks – Poole

St Ives – Cornwall

 

  1. Which of the following countries scores highest in the World Bank’s ease of doing business index?

 

UK

UAE

US

New Zealand

 

  1. The Chartered Society of Physiotherapists said that which of the following is damaging our muscles?

 

Sedentary jobs

Online shopping

Fast food

Ride-hailing services

 

  1. In a blind taste test of champagnes by a panel of experts conducted by Which? magazine Co-op’s Les Pionniers NV scored 76%, higher than the more expensive Moet & Chandon Brut Imperial NV Champagne (72%). The Moet & Chandon costs £34 a bottle; how much does the Co-op champagne cost?

 

£13.99

£20.50

£16.99

 

Answers

  1. Which of the following countries has the most affordable housing market relative to incomes, according to The Economist’s house price affordability index?

 

Singapore

UK

Germany

Japan

Answer: Singapore. Property in Singapore is undervalued by 38% relative to a long-run average of incomes. Despite the city being well known for the expensive rents of western expats, four-fifths of the permanent population live in subsidised units built by the government, most of them as owner-occupiers. Using the same metric UK housing is overvalued by 31% and the most overvalued, perhaps unsurprisingly is Hong Kong. German property is undervalued by 7%, but this number has halved since 2008 thanks to rising house prices.

 

  1. Which of the following ranks as the world’s happiest country in the UN’s World Happiness Report for 2017?

 

US

China

Costa Rica

Norway

Answer: Norway. Norway has knocked Denmark off its perch as the happiest place on earth. The report measures “subjective wellbeing” across more than 150 countries. This year the report contains a chapter examining why happiness levels in the US are falling despite constant economic improvement. The US is in 14th place and the UK ranks in 19th position. Measured happiness in China has lagged behind rapid growth in its economy. From 1990 to 2005 life satisfaction in China declined, since when it has turned up. However, for lower income and older Chinese people life satisfaction is below 1990 levels. Costa Rica ranks 12th in the UN happiness index, despite having a far lower GDP per head than similarly ranked nations.

 

  1. In which of the following countries do people work the longest hours?

 

UK

Poland

Mexico

Germany

Answer: Mexico. Mexico comes top of the 36 countries for which the OECD provide data on average annual hours worked. Mexican workers work on average 2,255 hours per year, which is equivalent to working for almost 9 hours a day, five days a week, all-year round with no holiday. German workers have the lowest workload at just 1,363 hours per year, meaning that they work on average 17 hours less per week than the Mexicans. The UK comes in around two thirds of the way down the list, with an average working week of 32 hours (not including holidays). However, working longer hours doesn’t necessarily mean more output. Average output per worker in Mexico is $18.5/ hour compared to $59.8/ hour in Germany, meaning Mexicans have to work for three hours to produce the same value of output that German workers produce in an one hour.

 

  1. Which country’s currency is the most undervalued against the British pound using the the Economist’s Big Mac index?

 

Norway

Ukraine

Sweden

Switzerland

Answer. Ukraine. The Big Mac index was invented by The Economist as a light-hearted guide to whether currencies are at their equilibrium rate. It is based on the idea of purchasing-power parity - that in the long run currencies should move towards the rate that would equalize the prices of an identical basket of goods – or in this case a single product, a Big Mac - in any two countries.

A Big Mac in the Ukraine costs 44 Hryvnia and £3.19 in the UK. Thus the implied exchange rate is 13.8 Hryvnia for £1 while the official rate is 33.4 Hyrvnia per £1. This implies that the Hryvnia is undervalued by 59%, making it the most undervalued of the currencies that the Economist covers. A Briton could buy a Big Mac in Kiev for the equivalent of £1.32. According to the Big Mac index Switzerland has the most overvalued currency (by 64%) relative to sterling. Norway and Sweden are the second and third-most overvalued currencies compared to sterling.

 

  1. United Airlines temporarily suspended flights to which city this year as a result of concerns over poor air quality?

 

Bangkok

Beijing

London

New Delhi

Answer: New Delhi. Pollution in India’s capital reached hazardous levels earlier this year. Schools were closed and the government banned most construction and industrial activity. The UK Government warned travellers that “severe air pollution is a major hazard to public health in Delhi”. World Health Organisation data shows that the Delhi ranks 11th in the World for levels of dangerous ultra-fine particles in the air. The worst city is Zabol in Iran, followed by Gwalior in India.

 

  1. According to a Credit Suisse study the wealthiest 1% of the world’s population own what proportion of global wealth?

 

10%

30%

50%

90%

Answer: 50%. The Credit Suisse report shows that the share of global wealth owned by the top 1% has been on an upward path since the financial crisis. Global wealth inequality has risen in the post-crisis period and there are 2.3 million new dollar millionaires this year, taking the total to 36 million. These millionaires, who account for 0.7% of the world’s population, hold 46% of total global wealth which now stands at $280tn.

 

  1. A parking space in the UK sold for £40,000 this year. Where was it?

 

Mayfair – London

Chelsea – London

Sandbanks – Poole

St Ives – Cornwall

Answer: St Ives. The parking space is within easy walking distance of the beach, harbour and town centre. Parking is at a premium in St Ives, which is a popular location for second homes, and car parks are often full kin summer. There are 970 of the 999 years left on the lease for the parking place.

£40,000 may sound excessive for a parking space. However, it costs £1/ hour to park a car in St Ives. If you assume that the spot is occupied for 12 hours a day for four months of the year (peak season), this saves £1,440, or an implied annual yield of 3.6% on a £40,000 investment. This doesn’t seem bad in a world of low returns.

 

  1. Which of the following countries scores highest in the World Bank’s ease of doing business index?

 

UK

UAE

US

New Zealand

Answer: New Zealand. New Zealand ranks highest overall as a result of the ease of starting a business and registering property. The UK is in 7th place and the US in 8th place. The UAE is the Middle East’s highest ranked economy, ahead of several major nations including France, Japan, the Netherlands and Switzerland.

 

  1. The Chartered Society of Physiotherapists said that which of the following is damaging our muscles?

 

Sedentary jobs

Online shopping

Fast food

Ride-hailing services

Answer: Online shopping. Professor Karen Middleton, chief executive of the Chartered Society of Physiotherapy said “Online shopping may be convenient but it does mean that we are losing some of the methods that used to exist for strengthening our muscles”. Muscle-strengthening exercises are important in keeping people healthy in old age, and we should learn to build these into everyday life rather than relying on hitting the gym.

 

  1. In a blind taste test of champagnes by a panel of experts conducted by Which? magazine Co-op’s Les Pionniers NV scored 76%, higher than the more expensive Moet & Chandon Brut Imperial NV Champagne (72%). The Moet & Chandon costs £34 a bottle; how much does the Co-op champagne cost?

 

£13.99

£20.50

£16.99

Answer: £16.99. The Co-op champagne costs £16.99 but won praise for being “lovely and mature” with “creamy aromas.” The panellists said it is “well balanced and elegant, with flavours of apple peel and lemon.”