Question

Purchasing power parity is used to adjust gross national income in order to make a more direct comparison of________in various countries.

a. living standards.
b. population density.
c. geographical area.
d. factor endowments.
e. labor productivity.

Answer 1

A. living standards.

Step-by-step explanation:

HDI( Human development index) has been trying to assess 189 different countries and territories, with very different price levels. In order to compare economic statistics across countries, the data must first be converted into a common currency. In contrast to market exchange rates, PPP exchange rates make it possible for this conversion to take into account price differences between countries. This best represents the standard of living of people, GNI per capita (PPP)