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Which of the Following Explains Why Per-Capita GDP Converted at Market

Question 29

Multiple Choice

Which of the following explains why per-capita GDP converted at market exchange rates inaccurately depicts the potential of an emerging market?


A) The market exchange rate does not take into consideration distribution and production costs for each nation.
B) Products and services in emerging markets are priced significantly lower than they are in advanced economies.
C) The per-capita GDP converted using PPP exchange rates provides a precise measure of consumer buying potential.
D) Products manufactured in emerging markets are priced less than products that are imported outside of an economic bloc.

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