Which of the following is a true statement about comparing
world incomes?
A. The purchasing power of currency is about the same in most
countries, so it is not necessary to adjust for purchasing
power.
B. Adjusting world incomes for purchasing power gives a more
accurate view than using market foreign exchange rates.
C. The best way to compare world incomes is to convert to a
common currency using market foreign exchange rates.
D. It is more accurate to compare world incomes by using per
capita income measured in the currency of each nation.
Answer
B. Adjusting world incomes for purchasing power gives a more
accurate view than using market foreign exchange rates.
