Principles of Economics 2e
Principles of Economics 2e
2nd Edition
ISBN: 9781947172364
Author: Steven A. Greenlaw; David Shapiro
Publisher: OpenStax
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Chapter 19, Problem 25CTQ

Cross country comparisons of GDP per capita typically use purchasing power parity equivalent exchange rates, which are a measure of the long run equilibrium value of an exchange rate. In fact, we used PPP equivalent exchange rates in this module. Why could using market exchange rates, which sometimes change dramatically in a short period of time, be misleading?

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We saw in class that PPP conversion factors are different from market exchange rates because they are based on the actual purchasing powers of currencies. The table below shows the GDP of different countries in their local currency along with their GDP at the market exchange rate, population, and the PPP conversion factor. country GDP in 2017 GDP (US$s, at market ex.) PPP factor роpulation Japan 544¥ trillion $4.86 trillion 105 ¥/$ 127.5 million India 1717 trillion $2.65 trillion 20 7/$ 1339 million |Мexico 22 trillion pesos $1.16 trillion 11 pesos/$ 129 million Which country has the higher GDP per capita measured in purchasing power, India or Mexico? Mexico's average income is more than double India's India's average income is more than double Mexico's Mexico and India have similar average incomes not enough information is provided
Kindly answer in narrative form. Please cite your sources. Thank you so much!1. What are the GNP and Per capita GNP in Denmark?2. What Type of Currency does Denmark have? and what is the relation to US Currency?
If the Gross Domestic Product (GDP) is adjusted for the PPP (Purchasing Power Parity, or what a U.S. dollar can buy in each country), what would be the correct ordering of the economies if we order them from the highest to the lowest - in terms of the GDP by PPP? Please choose your answer from the below list of countries - ranked correctly from highest to the lowest, as per the 2020 IMF estimates Group of answer choices   China, Germany, United States, Japan and United Kingdom.   United States, China, Germany, United Kingdom, and Japan.   China, United States, India, Japan and Germany.

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Principles of Economics 2e

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