Per-capita GDP converted at market exchange rates paints an inaccurate picture of market potential because it overlooks the substantial price differences between advanced economies and emerging markets.

Question

Quizplus · Accepted Answer

Per-capita GDP at market exchange rates does not account for purchasing power parity (PPP), which adjusts for price level differences across countries, thus providing a more accurate measure of market potential by reflecting the actual living standards and consumption capabilities of populations.

Per-Capita GDP Converted at Market Exchange Rates Paints an Inaccurate