Which of the following is a problem when comparing GDPs per capita between nations?
A) GDP per capita only measures income distribution.
B) Fluctuations in exchange rates affect differences in GDP per capita.
C) GDP per capita is subject to greater measurement errors for IACs compared to LDCs.
D) GDP per capita is likely overstated in LDCs due to families producing goods and services outside of the pricing system.

Question

Quizplus · Accepted Answer

Fluctuations in exchange rates can greatly affect the differences in GDP per capita between nations, as the value of the currency used to measure GDP can change rapidly and dramatically. This makes it difficult to accurately compare the economic performance of different countries based solely on their GDPs per capita. Other factors, such as income inequality and informal economies, can also impact the accuracy and usefulness of GDP per capita as a measure of economic well-being.

Which of the Following Is a Problem When Comparing GDPs