For a country with relatively lower level of cost of living PPP per capita GNI will be
A)lower than per capita GNI.
B)higher than per capita GNI.
C)same as per capita GNI.
D)may be lower or higher than per capita GNI.

Question

Quizplus · Accepted Answer

Purchasing Power Parity (PPP) adjusts for differences in price levels between countries, allowing for a more accurate comparison of economic indicators. In a country with a lower cost of living, PPP per capita GNI will be higher than nominal per capita GNI because it reflects the increased purchasing power of income in that country.

For a Country with Relatively Lower Level of Cost of Living