Question

Which of the following is true? A) The gap between the income per capita of U.S...

Which of the following is true?

A) The gap between the income per capita of U.S and the income per capita of poorer countries is large when PPP-based measures are used.

B) Exchange rate-based measures of income per capita are identical to PPP-based measures.

C) The gap between the income per capita of U.S and the income per capita of poorer countries is small when exchange rate-based measures are used.

D) Exchange rate-based measures of income per capita differ from PPP-based measures of income per capita

160) Which of the following should be used to compare the incomes of countries with huge differences in cost of living?

A) Gross national product

B) PPP-based measure of income per capita

C) Exchange rate-based measure of income per capita

D) Income per working age population

161) Which of the following is an alternative measure of exchange rate proposed by The Economist magazine?

A) The Consumer Price Index

B) The midcap index

C) The Big Mac Index

D) The GDP deflator

Which of the following should be used to compare the incomes of countries with equal population but different unemployment rates?

A) Exchange rate-based measure of income per capita

B) PPP-based measure of income per capita

C) Income per worker

D) Gross national product

If the number of workers in a country is 12,000 and its income per worker is $380, its gross domestic product is ________.

A) $1,240,000 B) $4,560,000 C) $618,000 D) $524,000

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Homework Answers

Answer #1

159) D) Exchange rate-based measures of income per capita differ from PPP-based measures of income per capita.
(Income per capita can be measured based on exchange rate and based on PPP. These two approaches are different)

160) B) PPP-based measure of income per capita
(When there are differences in cost of living then purchasing power parity based measure of income per capita is used to compare incomes of countries)

161) C) The Big Mac Index
(The Big Mac Index is the alternative measure proposed by the Economist magazine)

162) C) Income per worker
(Income per worker would tell the actual amount available for each worker so it will be useful in given case)

163) B) $4,560,000
(GDP = Total workers*income per worker = (12,000)*(380) = $4,560,000)

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