To facilitate the international comparisons of living standards around the world, adjustments are supposed to be made to each country's GDP.These adjustments require:
A)calculating each country's GDP in terms of U.S.dollar, dividing it by the general price level and, subtracting the previous year's value of the country's GDP from it.
B)converting each country's GDP to U.S.dollars, dividing it by the country's population and, to adjust the resulting figure for the purchasing power parity.
C)each country's GDP should be multiplied by its general price level.
D)there is no need for any adjustments since, each country's GDP is the representative of its standard of living.

Question

Quizplus · Accepted Answer

Adjustments are made by converting each country's GDP to U.S. dollars (for ease of comparison) and then dividing it by the country's population to get per capita income. However, this alone does not account for differences in the cost of living, which is why the resulting figure is adjusted for purchasing power parity (PPP). This takes into account the differences in the cost of living between countries and provides a more accurate comparison of living standards.

To Facilitate the International Comparisons of Living Standards Around the World