Which of the following is a problem when comparing GDPs per capita between nations?
a. Fluctuations in exchange rates affect differences in GDP per capita.
b. GDP per capita fails to measure income distribution.
c. All of the answers are correct.
d. GDP per capita is subject to greater measurement errors for LDCs compared to IACs.
c
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In the case of a currency union, what is a nominal anchor?
A) It is the weight of the efficiency loss from changing to a common currency. B) It is an independent value, such as the value of the common currency unit, constraining the ability of a nation to inflate its currency and prices. C) It is a nominal measure of GDP that is not the same as the measure for real GDP. D) It links that nation to other members of the currency union and permits no trade or financial relationships outside the union.
The linkage between high productivity and high earnings is vitally important because
a. it provides individuals with a strong incentive to develop skills and engage in activities that others value highly. b. high productivity (a large output per hour worked) is the key to high living standards. c. it brings the self-interest of individuals into harmony with economic progress. d. all of the above are true.