The most meaningful way to compare per capita Gross Domestic Product (GDP) across countries is to
A) use foreign exchange rates to convert each country's per capita Gross Domestic Product (GDP) into dollars. Then compare.
B) first adjust each country's per capita Gross Domestic Product (GDP) to exclude all the goods and services that are not exchanged with other countries.
C) assume that the cost of living in each country is the same as the United States' cost of living.
D) first use purchasing power parity to factor in each country's true cost of living.

Question

Quizplus · Accepted Answer

Using purchasing power parity (PPP) is the most meaningful way to compare per capita GDP across countries as it takes into consideration the true cost of living in each country, rather than relying on foreign exchange rates or assumptions about cost of living. PPP reflects the actual prices of goods and services within each country and thus provides a more accurate comparison of the material well-being of individuals in different countries.

The Most Meaningful Way to Compare Per Capita Gross Domestic