ECONOMICS
ECONOMIC DEVELOPMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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The total income of a country
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How much people earn on average
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How much you can buy with your money
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None of the above
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Detailed explanation-1: -In their simplest form, PPPs are simply price relatives that show the ratio of the prices in national currencies of the same good or service in different countries. PPPs are also calculated for product groups and for each of the various levels of aggregation up to and including GDP.
Detailed explanation-2: -The PPP formula is calculated by multiplying the cost of a particular product or service with the first currency by the price of the same goods or services in U.S. dollars.
Detailed explanation-3: -What is GDP per capita based on PPP? GDP per capita (PPP based) is gross domestic product converted to international dollars using purchasing power parity rates and divided by total population. An international dollar has the same purchasing power over GDP as a U.S. dollar has in the United States.
Detailed explanation-4: -The primary distinction between GDP and PPP is that GDP is the existing market price’s gross domestic product. And GDP (PPP) is the GDP modified to US dollars utilising purchasing power parity prices, which are then split by the aggregate prices.