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

According to the table, the price-level adjustment for China is 0.465, which means that the cost of living in China is approximately 53.5% cheaper than the United States. Therefore, to have the same standard of living as someone earning $30,000 in the United States, one would need to earn $30,000/0.465 = $64,516 in China. The closest answer choice is C, $22,500, which is less than half of $64,516 and therefore a reasonable estimate.

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