PPP-adjustment takes into account the differences in the prices of goods and services between countries, giving us a more accurate sense of the differences in living standards around the world. It does not only adjust tradable goods, inflate incomes of people in wealthier countries, or focus on changes in input prices.

Solved

PPP-Adjustment

Question 101

Multiple Choice

PPP-adjustment:

A) gives us a more realistic sense of differences in living standards around the world.
B) only adjusts the values of tradable goods.
C) inflates the incomes of people in wealthier countries.
D) focuses on changes in input prices around the world.

Correct Answer: