One limitation of using GDP per capita to compare standards of living between countries is that it:
A) does not account for what one can buy with a given amount of money in different countries.
B) is less precise in countries with larger populations.
C) does not clearly show the types of goods each country produces.
D) fails to consider natural resources.

Question

Quizplus · Accepted Answer

GDP per capita only measures the total output of a country divided by its population, but it does not take into account the cost of living or purchasing power parity between different countries. Therefore, it may not accurately reflect the actual standard of living in each country. For example, a country with a high GDP per capita may have a high cost of living, while a country with a lower GDP per capita may have a lower cost of living, meaning that people can afford more goods and services.

One Limitation of Using GDP Per Capita to Compare Standards