Why is it necessary to convert GDP figures to a common currency basis when comparing international economies?
Purchasing Power Parity in International Comparisons

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Business, Social Studies
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11th Grade - University
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7 questions
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1.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
To simplify the calculation process
To make accurate international comparisons
To adjust for population size
To account for inflation differences
2.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What factor significantly affects GDP per capita comparisons between countries like China, India, and the UK?
Natural resources
Government policies
Population size differences
Exchange rate fluctuations
3.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What is the primary purpose of using purchasing power parity (PPP) in economic comparisons?
To ensure fair trade practices
To equalize currency values
To compare the cost of living
To adjust for inflation
4.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
How does purchasing power parity (PPP) differ from market exchange rates in economic comparisons?
PPP uses a fixed exchange rate
PPP ignores currency fluctuations
PPP is based on historical data
PPP considers relative price levels
5.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What happens to GDP per capita figures when adjusted using PPP for countries like China and India?
They decrease significantly
They remain unchanged
They increase significantly
They become negative
6.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
How does the purchasing power of a dollar in China compare to that in the UK when using PPP?
It is lower in China
It fluctuates frequently
It is higher in China
It is the same in both countries
7.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Why is it important to use PPP for comparing the purchasing power of citizens in different countries?
To provide a fair comparison
To adjust for economic growth
To ensure currency stability
To promote international trade
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