Question

Because ____________ consumer expenditures eliminate differences in relative prices, marketers use these data to analyze how the composition of consumption changes with the level of development.

A. normalized
B. inflation-free
C. PPP-based
D. historical-cost
E. growth adjusted

Answer 1

Marketers use Purchasing Power Parity (PPP)-based consumer expenditures to analyze how the composition of consumption changes with the level of development.

Step-by-step explanation:

Marketers use Purchasing Power Parity (PPP)-based consumer expenditures to analyze how the composition of consumption changes with the level of development.

Purchasing Power Parity takes into account that the prices of the same goods are different across countries. By using PPP-based consumer expenditures, marketers can eliminate differences in relative prices and make meaningful comparisons across different levels of development.

For example, if a marketer wants to compare consumer spending patterns between two countries, they would use PPP-based consumer expenditures to standardize the data and account for the different relative prices in each country.