Which of the following statements is true of purchasing power parity (

QUESTION

Which of the following statements is true of purchasing power parity (PPP)?

A. PPP figures can be misleading because they don’t consider differences in the cost of living.

B. The PPP for different countries is adjusted (up or down) depending upon whether the cost of living is lower or higher than in Great Britain.

C. The PPP data gives a static picture of economic development.

D. China’s GNI PPP per capita is higher than that of the United States.

E. PPP adjustment does not allow for a direct comparison of living standards in different countries.

ANSWER

C
The GNI and PPP data give a static picture of development. They tell us, for example, that China is much poorer than the United States, but they do not tell us if China is closing the gap