you are watching a news report with your father. The news anchor points out that a certain troubled caribbean nation generates a GDP per capita of only 430$ per year. Since your father knows that the US GDP per capita is approximately 43000$ he suggests that we are materially 100 times better off in the united states

Respuesta :

Answer:

Your father's assumption is incorrect, due to the purchasing power parity (PPP). The PPP accounts for the differences in living costs between nations that have different GDPs per capita. For example, very poor nations tend to be cheaper than very rich nations, so the PPP adjusts the GDP per capita to the actual cost of the expenses in different countries. The US is used as a base, and most countries's currencies have a lower PPP, i.e. $1 dollar in a poor country buys more goods than $1 in the US. But some countries have a higher PPP than the US, e.g. Switzerland, Germany, Australia.