This table shows the price-level adjustment as compared to the United States.
According to the information in the table shown,if someone were earning $30,000 in the United States,approximately what would they have to earn in China to have the same standard of living?

Question

This table shows the price-level adjustment as compared to the United States. 
According to the information in the table shown,if someone were earning $30,000 in the United States,approximately what would they have to earn in China to have the same standard of living?

Quizplus · Accepted Answer

From the table, we can see that the price-level adjustment for China is 0.75. This means that prices in China are 25% cheaper than the United States. Therefore, to have the same standard of living in China as someone earning $30,000 in the United States, they would need to earn $30,000/0.75 = $40,000 in China. However, the question asks for approximately the same standard of living, so the closest answer choice is C) $22,500, which is approximately 25% less than $30,000.

This Table Shows the Price-Level Adjustment as Compared to the United