Which of the following is not true regarding the Atlas conversion factor?
A) It was developed to reduce the impact of inflation-based changes on GNI estimates.
B) It is the arithmetic average of the current exchange rate and the exchange rates in the two preceding years, adjusted by the ratio of domestic inflation to the combined inflation rates of the euro zone, Japan, the United Kingdom, and the United States.
C) Incomes measured by the Atlas conversion factor are generally more stable over time.
D) Changes in income rankings are more likely to be due to relative economic performance than to fluctuations in the exchange rate.
E) Dissatisfaction with both the PPP and conversions using official exchange rates caused the World Bank to adopt the Atlas methodology to derive per capita GNI estimates.
Correct Answer:
Verified
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