To get an accurate view of how GDPs differ across countries, we simply need to convert all countries' GDPs into dollars using the prevailing exchange rate.

Question

Quizplus · Accepted Answer

Converting GDPs into dollars using the prevailing exchange rate can be unreliable and inaccurate as exchange rates are subject to fluctuations and do not necessarily reflect the actual purchasing power of a currency in a country. To get a more accurate comparison of GDPs across countries, a better approach is to use measures such as purchasing power parity (PPP) which account for differences in the cost of living and inflation between countries.

To Get an Accurate View of How GDPs Differ Across