The purchasing power parity method of comparing income levels across countries

a. calculates the cost of purchasing a common bundle of goods in each country and then uses this price index to convert each country's income to a common currency.
b. uses the exchange rate to convert the income level of each country to a common currency.
c. uses the prime interest rate in each country to convert the income level of each country to a common currency.
d. calculates the ratio of imports relative to exports in each country and then uses this ratio to convert each country's income to a common currency.


A

Economics

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