Purchasing power parity prices are used to construct GDP data that
A) do not omit the underground economy.
B) can be used to make more valid comparisons between one country and another.
C) is a proper measure of economic welfare.
D) adjust for differences in population.

Question

Quizplus · Accepted Answer

Purchasing power parity (PPP) prices are used to adjust GDP data so that it reflects the relative purchasing power of different currencies. This allows for more accurate comparisons of economic output and living standards between countries by eliminating the distortions caused by exchange rates.

Purchasing Power Parity Prices Are Used to Construct GDP Data