Ecuador's GDP per capita in 2008, based on market exchange rates, was $3 ,100.In that same year, Ecuador's GDP per capita based on purchasing power parity was $7
,700.The difference between these two measures of GDP per capita is most likely explained by:
A)Ecuador's dual economy.
B)differences in relative prices between Ecuador and other countries.
C)Ecuador's limited capital account convertibility.
D)credentialism.

Question

Quizplus · Accepted Answer

The difference between GDP per capita based on market exchange rates and purchasing power parity (PPP) is typically due to differences in relative prices between countries. PPP accounts for the cost of living and inflation rates, providing a more accurate measure of the average standard of living.

Ecuador's GDP Per Capita in 2008, Based on Market Exchange