If you know that a meal costing $40 in the United States would cost $2 in Bangladesh and this is representative of the relative prices of most goods, you also know that:
A. GDP using market prices would overstate the value of output for the United States.
B. GDP using market prices would overstate the value of output for Bangladesh.
C. purchasing power parity would decrease comparative GDP for Bangladesh.
D. purchasing power parity would increase comparative GDP for Bangladesh.
Answer: D
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Answer the next question based on the following payoff matrix for a duopoly in which the numbers indicate the profit in millions of dollars for each firm. Firm A? High PriceLow PriceFirm BHigh priceA = $250A = $325??B = $250B = $200?Low priceA = $200A = $175??B = $325B = $175If firm A adopts the high-price strategy, then firm B would adopt the
A. low-price strategy and earn $175. B. low-price strategy and earn $325. C. high-price strategy and earn $250. D. high-price strategy and earn $200.
If the government cuts taxes ________
A) disposable income falls B) planned expenditures rise C) the IS curve shifts to the left D) all of the above E) none of the above
Among the answers given below, which one does not explain why an economy grows?
a. growth of population and the labor force b. capital accumulation and capital deepening c. technological change d. high death rates and high birth rates e. increases in skill levels for workers
The average American pays a higher percent of his income in taxes today than he would have in the late 18th century
a. True b. False Indicate whether the statement is true or false